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How occupied France financed its own exploitation during WW2

Author

Listed:
  • Kim Oosterlinck
  • Filippo Occhino
  • Eugene N. White

Abstract

The 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.

Suggested Citation

  • Kim Oosterlinck & Filippo Occhino & Eugene N. White, 2006. "How occupied France financed its own exploitation during WW2," Working Papers CEB 06-012.RS, ULB -- Universite Libre de Bruxelles.
  • Handle: RePEc:sol:wpaper:06-012
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    Citations

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    Cited by:

    1. Kim Oosterlinck & Loredana Ureche-Rangau & Jacques-Marie Vaslin, 2013. "Waterloo: a Godsend for French Public Finances?," Working Papers 0041, European Historical Economics Society (EHES).
    2. Huff, Gregg & Majima, Shinobu, 2013. "Financing Japan's World War II Occupation of Southeast Asia," The Journal of Economic History, Cambridge University Press, vol. 73(04), pages 937-977, December.
    3. Geraldine David & Kim Oosterlinck, 2012. "War, Inflation, Monetary Reform and the Art Market," Working Papers 0012, European Historical Economics Society (EHES).
    4. Georges Gallais-Hamonno & Thi-hong-van Hoang & Kim Oosterlinck, 2016. "Price Formation on Clandestine Markets: The Case of the Paris Gold Market during WWII," Working Papers CEB 16-048, ULB -- Universite Libre de Bruxelles.
    5. Kim Oosterlinck & Jeremy Simon, 2015. "Financial Repression and Bond Market Efficiency: the Case of Italy during World War II," Working Papers CEB 15-001, ULB -- Universite Libre de Bruxelles.
    6. Geraldine David & Kim Oosterlinck, 2011. "War, Inflation, Monetary Reforms and the Art Market .The Belgian Art market (1944 – 1951)," Working Papers CEB 11-055, ULB -- Universite Libre de Bruxelles.
    7. Huff, Gregg & Majima, Shinobu, 2013. "Financing Japan's World War II Occupation of Southeast Asia," The Journal of Economic History, Cambridge University Press, vol. 73(04), pages 937-977, December.

    More about this item

    Keywords

    World War Two; France; Macroeconomy; Economic History; Exploitation.;

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