TY  - JOUR
AU  - Occhino,Filippo
AU  - Oosterlinck,Kim
AU  - White,Eugene N.
TI  - How Occupied France Financed Its Own Exploitation in World War II
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 12137
PY  - 2006
Y2  - April 2006
UR  - http://www.nber.org/papers/w12137
L1  - http://www.nber.org/papers/w12137.pdf
N1  - Author contact info:
Filippo Occhino
Research Department
Federal Reserve Bank of Cleveland
1455 East 6th Street
Cleveland, OH 44114
E-Mail: filippo.occhino@clev.frb.org

Kim Oosterlinck
Solvay Business School
Université Libre de Bruxelles
(visiting Rutgers)
E-Mail: koosterl@ulb.ac.be

Eugene N. White
Department of Economics
Rutgers University
75 Hamilton Street
New Brunswick, NJ 08901-1248
Tel: 732-932-7363
Fax: 732/932-7416
E-Mail: white@economics.rutgers.edu
AB  - 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%u2019s 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%u2019s burden.
ER  -