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

Jean-Charles ASSELAIN (IFReDE-CMHE GRES, Correspondant de l'Institut), Bertrand Blancheton (), Christian BORDES (TEAM, Université Paris I) and Marc-Alexandre Senegas

Cahiers du GRES (2002-2009) from Groupement de Recherches Economiques et Sociales

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.

Keywords: inflation; public debt; FTPL (search for similar items in EconPapers)
JEL-codes: E63 N14 (search for similar items in EconPapers)
Date: 2003
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Persistent link: https://EconPapers.repec.org/RePEc:grs:wpegrs:2003-13

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