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FTPL and war reparations : the French and German monetary experiences in the Interwar period (In French)

Author

Listed:
  • Jean-Charles ASSELAIN (IFReDE-CMHE GRES, Correspondant de l'Institut)
  • Bertrand BLANCHETON (IFReDE-CMHE GRES)
  • Christian BORDES (TEAM, Université Paris I)
  • Marc-Alexandre SENEGAS (GRAPE, Université Bordeaux IV)

Abstract

In this paper, we try to investigate the rationale for using the Fiscal Theory of the Price Level (FTPL) as a relevant theoretical framework for analysing French and German monetary experiences in the Interwar period. This approach involves considering the evolution of public debt as the main anchoring factor of the price level through the respect of the intertemporal budget constraint by the public sector. French and german stylized facts, especially during the 1919-1926 period seem at first glance to be in accordance with this relationship. A more precise analysis of the monetary policy implementation suggests, however, that only the weak form (instead of the strong one) of the FTPL could have prevailed. Indeed, the requirement of stable public debt dynamics went hand in hand with the domination of monetary policy by fiscal policy.

Suggested Citation

  • Jean-Charles ASSELAIN (IFReDE-CMHE GRES, Correspondant de l'Institut) & Bertrand BLANCHETON (IFReDE-CMHE GRES) & Christian BORDES (TEAM, Université Paris I) & Marc-Alexandre SENEGAS (GRAPE, Université, 2003. "FTPL and war reparations : the French and German monetary experiences in the Interwar period (In French)," Cahiers du GRES (2002-2009) 2003-13, Groupement de Recherches Economiques et Sociales.
  • Handle: RePEc:grs:wpegrs:2003-13
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    Keywords

    inflation; public debt; FTPL;

    JEL classification:

    • N14 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: 1913-
    • E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy

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