ABSTRACT
This chapter focuses on changes in the pattern of intra-Asian settlements after WWI, and their significance in the evolution of the global economy. The historical origins of the Pacific economy can be dated to the founding of Manila in 1571 and the galleon trade between the Philippines and Mexico. The Depression has been a controversial issue among economic historians, and has been analysed from various viewpoints. Some historians attributed its causes to domestic factors, such as tight monetary policy, maladjustment of the gold standard mechanism and the failure of balanced-budget policies. India, in particular, served as a ‘safety-valve’ funding the British deficit with the industrial countries and stabilising international settlements. Saul indicated that India's massive deficit with the United Kingdom was balanced by her massive surplus with Continental Europe, the United States and other Asian economies. Asian economies, and particularly Japan, experienced drastic ‘qualitative’ changes in their patterns of settlement during the inter-war period.
