national budget to reduce inflation More efficient tax collection Dissolving the Reconstruction Finance Bank because of its uneconomical loans Decreasing the scope of government intervention Fixing the exchange rate to 360 yen to one US dollar to keep Japanese export prices low Effects These policies succeeded in getting Japan's rampant inflation under control, but caused significant short-term hardship for Japanese workers, leading to mass layoffs as the economy went into contraction, a painful period of economic adjustment known as the "Dodge squeeze." Japan was plunged into a severe recession (:ja:安定恐慌), which did not end until the massive economic stimulus produced by U.S. military special procurements in Japan following the outbreak of the Korean War in 1950. The fixed exchange rate of 360 yen to one dollar remained unchanged into the early 1970s, helping turbo-charge Japanese exports and fueling the Japanese economic miracle. Economic indicators and timeline References Citations Sources cited Occupied Japan Economy of Japan