How occupied France financed its own exploitation during WW2
AbstractThe occupation payments made by France to Nazi Germany between 1940 and 1944 represent one of the largest recorded international transfers and contributed significantly to financing the overall German war effort. Using a neoclassical growth model that incorporates essential features of the occupied economy and the postwar stabilization, we assess the welfare costs of French policies that funded payments to Germany. Occupation payments required a 16 percent reduction of consumption for twenty years, with the draft of labor to Germany and wage and price controls adding substantially to this burden. Vichy’s postwar debt overhang would have demanded large budget surpluses; but inflation, which erupted after Liberation, reduced the debt well below its steady state level and redistributed the adjustment costs. The Marshall Plan played only a minor direct role, and international credits helped to substantially lower the nation’s burden.
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Bibliographic InfoPaper provided by ULB -- Universite Libre de Bruxelles in its series Working Papers CEB with number 06-012.RS.
Length: 56 p.
Date of creation: Mar 2006
Date of revision:
Publication status: Published by: Centre Emile Bernheim, Bruxelles
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World War Two; France; Macroeconomy; Economic History; Exploitation.;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-06-24 (All new papers)
- NEP-DGE-2006-06-24 (Dynamic General Equilibrium)
- NEP-HIS-2006-06-24 (Business, Economic & Financial History)
- NEP-MAC-2006-06-24 (Macroeconomics)
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