391 Tōkai Recession

The **391 Tōkai Recession** was a period of economic decline in the economies of countries utilizing the Shingōan Yen as their primary currency. These countries included Shingō, Tsukimoto, and Yokoze, however, other nations such as Kaungkinmyay and Dal Sulo also experienced less severe declines. The recession lasted from July 2nd, 391 to January 18th, 392.

The causes of the 391 Tōkai Recession include a combination of vulnerabilities that developed in the regional financial system, in addition to predatory practices by large corporations that had emerged during the Industrial Revolution. The sudden growth of automated manufacturing led to mass unemployment as many hand-manufacturing companies went out of business. Additionally, the depletion of diamond reserves led to the mass devaluing of the Shingōan Yen, as the value of the Yen had been backed by diamonds. This devaluation resulted in borrowers being unable to pay back loans, thus forcing the governments of both nations to bail out their biggest banks. In Shingō, farmers and rural citizens were especially impacted by the recession.

The recession officially ended on 18 January, 392 when the Shingōan Yen returned to its pre-recession value and inflation had been brought back to controllable levels. Government bailouts and stimulus packages are believed to have contributed to the end of the recession.

## Impact

The recession gave rise to several populist movements in both Shingō and Tsukimoto. Most notably, the Recovery Association was formed and quickly gained popularity among rural voters, which resulted in its gain of 5 seats in the 77th Shingōan National Election. In the election, incumbent Prime Minister Kyō Morikawa of the Liberty Party was defeated by Shōgo Kobayashi of the Reform Party, who then formed a coalition government with the Recovery Association. Throughout this period, public support for fiat money grew significantly.

On September 15th, Kei Shimizu resigned as prime minister of Yokoze, citing his inability to deliver on his promises to protect the nation from the fallout of the recession. Tomoya Hirasawa subsequently became the next prime minister, however, his government saw the rapid growth of unemployment and national debt. On December 3rd, the Yokozean Parliament voted to dissolve itself and several members of the ruling Workers Party left to form the Yokoze New Party, which went on to win a plurality in parliament on December 14th in the 12th Yokozean National Election. Hiro Tachibana, the leader of the Yokoze New Party, consequently became the next prime minister.

On November 3rd, Tsukimotoan President Cho Han-gyeol resigned due to growing opposition against his leadership during the recession. He was soon replaced by Jeon Do-hyun.

## 392 Tsukimotoan Depression

The 391 Tōkai Recession is widely believed to have directly contributed to the 392 Tsukimotoan Depression, which began less than two months after the conclusion of the recession. Specifically, the Tsukimotoan government's response to the recession was heavily criticized for not providing significant financial aid packages to major banks and corporations, which then proceeded to collapse under economic pressure.