Halting Inflation in Italy and France After World War II / Alessandra Casella, Barry Eichengreen.

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Casella, Alessandra

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Material type: Text

TextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w3852.Publication details: Cambridge, Mass. National Bureau of Economic Research 1991.Description: 1 online resource: illustrations (black and white)Subject(s):

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Abstract: In the aftermath of World War II, Italy and France experienced high inflation. The two countries enacted remarkably similar economic policy measures, but stabilization came at different times: for Italy at the end of 1947, for France a year later. Traditional explanations for the regained price stability cannot account for the difference in timing. In this paper, we use the international comparison to shed light on the nature of the inflationary process and on the cause of its decline. We conclude that inflation was symptomatic of an unresolved distributional conflict, and carne to an end when one political group, in both countries the Left, accepted its defeat. The Marshall plan helped to bring the stabilization about by reducing the costs to the group offering concessions. We argue that the French delay in stabilizing can be imputed to differences in the political climate and to the ambitious program of public investment.

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Item type	Home library	Collection	Call number	Status	Date due	Barcode	Item holds
Working Paper	Biblioteca Digital	Colección NBER	nber w3852 (Browse shelf(Opens below))	Not For Loan

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September 1991.

In the aftermath of World War II, Italy and France experienced high inflation. The two countries enacted remarkably similar economic policy measures, but stabilization came at different times: for Italy at the end of 1947, for France a year later. Traditional explanations for the regained price stability cannot account for the difference in timing. In this paper, we use the international comparison to shed light on the nature of the inflationary process and on the cause of its decline. We conclude that inflation was symptomatic of an unresolved distributional conflict, and carne to an end when one political group, in both countries the Left, accepted its defeat. The Marshall plan helped to bring the stabilization about by reducing the costs to the group offering concessions. We argue that the French delay in stabilizing can be imputed to differences in the political climate and to the ambitious program of public investment.