This paper is a first attempt to evaluate the economic effects of the Marshall Plan. We find that US aid had a significant impact on Europe's recovery from World War II. The recipients of large amounts of Marshall aid recovered significantly faster than other industrial countries. Strikingly, however, we find that the obvious channels through which the Marshall Plan could have affected European recovery - stimulating investment, augmenting capacity to import and financing infrastructure repair - were relatively unimportant. Rather, the crucial role of the Marshall Plan was to facilitate the restoration of financial stability and the liberalization of production and prices.
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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number
638.
Find related papers by JEL classification: F31 - International Economics - - International Finance - - - Foreign Exchange N14 - Economic History - - Macroeconomics and Monetary Economics; Growth and Fluctuations - - - Europe: 1913- O22 - Economic Development, Technological Change, and Growth - - Development Planning and Policy - - - Project Analysis
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