Einaudi e l'inflazione del 1946-47: un riesame

The paper reviews monetary developments in Italy after World War II in the light of the interpretation put forward by Guido Carli in his memoirs. According to Carli, Einaudi deliberately followed an inflationary policy, through the expansion of bank credit, in order to revitalize the "animal spirits" of Italian capitalism and "burn" the high public debt accumulated during the war; once these objectives were achieved, a sharp stabilization program was put in action. This interpretation cannot be confirmed by a careful re-examination of that monetary episode. Beside the objectives of stimulating a rapid economic recovery and restoring the standard mechanisms of a free market economy, at the basis of Einaudi's policy there was an underestimation of the excess liquidity inherited from the war and the fear that measures for absorbing liquidity could cause a deflation process like the ones experienced by Italy and England in the Twenties. This view led to dismantling financial and monetary controls introduced during the war to channel excess liquidity to the Government. Delays in taking measures to end inflation can be attributed to the complexity of the decision-making process: institutional, cultural and organizational reasons were strictly intertwined with domestic and international political factors; within this general framework, the paper stresses the difference in roles and views between Einaudi and Menichella.