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- Title
How Occupied France Financed Its Own Exploitation in World War II.
- Authors
Occhino, Filippo; Oosterlinck, Kim; White, Eugene N
- Abstract
The article examines the fiscal policies by which the Vichy government of Occupied France in World War II financed the payments demanded by Germany after the 1940 armistice. It also presents the policies the post-Liberation French government imposed to deal with the aftermath of those costs. Currency exchange rates imposed by Germany made French goods cheap to purchase, in effect financing the occupation of France through French economic activity. Wage and price controls led to contraction of the French economy exacerbated by the forced draft of French labor for the German economy. The Vichy government was left with an accumulation of debt. The postwar government of France raised taxes, but did so to finance social expenditure, coping with the debt by allowing rampant inflation to lower its value.
- Subjects
GERMANY; FRANCE; PUBLIC finance; FRENCH economic policy; WORLD War II; WORLD War II -- Reparations; NAZI Germany, 1933-1945; GOVERNMENT policy; ECONOMIC policy; EUROPEAN history, 1918-1945
- Publication
American Economic Review, 2007, Vol 97, Issue 2, p295
- ISSN
0002-8282
- Publication type
Article
- DOI
10.1257/aer.97.2.295