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Controlling Credit. Central Banking and the Planned Economy in Postwar France, 1948–1973

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  • Eric Monnet

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, Centre de recherche de la Banque de France - Banque de France)

Abstract

It is common wisdom that central banks in the postwar (1945–1970s) period were passive bureaucracies constrained by fixed-exchange rates and inflationist fiscal policies. This view is mostly retrospective and informed by US and UK experiences. This book tells a different story. Eric Monnet shows that the Banque de France was at the heart of the postwar financial system and economic planning, and that it contributed to economic growth by both stabilizing inflation and fostering direct lending to priority economic activities. Credit was institutionalized as a social and economic objective. Monetary policy and credit controls were conflated. He then broadens his analysis to other European countries and sheds light on the evolution of central banks and credit policy before the Monetary Union. This new understanding has important ramifications for today, since many emerging markets have central bank policies that are similar to Western Europe's in the decades of high growth.

Suggested Citation

  • Eric Monnet, 2018. "Controlling Credit. Central Banking and the Planned Economy in Postwar France, 1948–1973," PSE-Ecole d'économie de Paris (Postprint) halshs-02921743, HAL.
    • Handle: RePEc:hal:pseptp:halshs-02921743
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    Cited by:

    1. Baubeau, Patrice & Teixeira, Mateo, 2024. "Inflation without politics: how French prices outsmarted bullets, 1938-1949," MPRA Paper 121621, University Library of Munich, Germany, revised 01 Aug 2024.
    2. Eric Monnet & Miklos Vari, 2023. "A Dilemma between Liquidity Regulation and Monetary Policy: Some History and Theory," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 55(4), pages 915-944, June.
    3. Jesus Fernandez-Villaverde & Daniel Sanches & Linda Schilling & Harald Uhlig, 2021. "Central Bank Digital Currency: Central Banking For All?," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 41, pages 225-242, July.
    4. Baer, Moritz & Campiglio, Emanuele & Deyris, Jérôme, 2021. "It takes two to dance: Institutional dynamics and climate-related financial policies," Ecological Economics, Elsevier, vol. 190(C).
    5. Monnet, Eric & Puy, Damien, 2020. "Do old habits die hard? Central banks and the Bretton Woods gold puzzle," Journal of International Economics, Elsevier, vol. 127(C).
    6. Patrice Baubeau & Eric Monnet & Angelo Riva & Stefano Ungaro, 2021. "Flight‐to‐safety and the credit crunch: a new history of the banking crises in France during the Great Depression," Economic History Review, Economic History Society, vol. 74(1), pages 223-250, February.
    7. Goutsmedt, Aurélien & Sergi, Francesco & Claveau, François & Fontan, Clément, 2023. "The Different Paths of Central Bank Scientization: The Case of the Bank of England," SocArXiv jzwdt, Center for Open Science.
    8. Mitchener, Kris & Monnet, Eric, 2023. "Connected Lending of Last Resort," CEPR Discussion Papers 17831, C.E.P.R. Discussion Papers.
    9. Eric Monnet & Miklos Vari, 2019. "Liquidity Ratios as Monetary Policy Tools: Some Historical Lessons for Macroprudential Policy," IMF Working Papers 2019/176, International Monetary Fund.
    10. Abiloro, T. O & Ilugbami, J. O., 2023. "Regulatory Institutions and National Economic Development in Nigeria," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 7(5), pages 1552-1575, May.
    11. van 't Klooster, Jens & van Tilburg, Rens, 2020. "Targeting a sustainable recovery with Green TLTROs," SocArXiv 2bx8h, Center for Open Science.
    12. Vincent Carret, 2022. "Investment Planning and the Input-Output Model in Postwar Europe," Working Papers hal-03895580, HAL.
    13. Juan Acosta & Beatrice Cherrier & François Claveau & Clément Fontan & Aurélien Goutsmedt & Francesco Sergi, 2023. "Six Decades of Economic Research at the Bank of England," Post-Print hal-03919394, HAL.
    14. Alec Chrystal & Forrest Capie, 2020. "The Money Study Group (MSG) at fifty: Twenty years of the MSG and another thirty of the Money, Macro, Finance Research Group (MMF)," Manchester School, University of Manchester, vol. 88(S1), pages 1-17, September.
    15. Le Gallo Florian, 2021. "Compiling the balance of payments: a statistical mission at the Banque de France since 1945 [Établir la balance des paiements : une mission statistique à la Banque de France depuis 1945]," Bulletin de la Banque de France, Banque de France, issue 238.
    16. Gabor, Daniela & Braun, Benjamin, 2023. "Green macrofinancial regimes," SocArXiv 4pkv8, Center for Open Science.
    17. Barry Eichengreen & Rui Esteves, 2022. "Up and away? Inflation and debt consolidation in historical perspective," Oxford Open Economics, Oxford University Press, vol. 1, pages 1-20.

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