How Much Can a Victor Force the Vanquished to Pay? France under the Nazi Boot

Occhino, Filippo; Oosterlinck, Kim; White, Eugene N.

doi:10.1017/s0022050708000016

Cited by 42 publications

(21 citation statements)

References 24 publications

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“…Wars are also known to generate inflation and Occupied France was no exception. The Occupation costs imposed on defeated France were considerable, even by comparison with the reparations demanded of Germany after World War I (Occhino et al ., , ). To cover these Occupation costs, the French government relied on money creation and bond issuance.…”

Section: Resultsmentioning

confidence: 99%

Art as a Wartime Investment: Conspicuous Consumption and Discretion

Oosterlinck

2017

The Economic Journal

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The financial underperformance of art as an investment is well documented. In contrast to studies conducted on peace-time periods, this paper shows that the art market in occupied France during WWII significantly outperformed all alternative investments (bonds, equities, as well as currencies exchanged on the black market) other than gold. This suggests that art may be a good hedge against low-probability disasters. The paper further demonstrates that motives to purchase art (consumption and investment) vary over time. In his theoretical model, Mandel (2009) attributes art's low return to the utility derived from conspicuous consumption. In occupied France during WWII, conspicuous consumption was impossible for artworks deemed "degenerate" by the Nazis. The price evolution of "degenerate" versus "non-degenerate" artworks confirms the importance of conspicuous consumption in artworks' pricing. Eventually, the paper defines the concept of discretion, the ability to store a large amount of value in small and easily transportable goods. During wartime, illegal activities and the risk of being forced to flee the country increased the interest for discreet assets as shown by the better performance of small (and thus discreet) artworks in comparison to large ones. ABSTRACTThe financial underperformance of art as an investment is well documented. In contrast to studies conducted on peace-time periods, this paper shows that the art market in occupied France during WWII significantly outperformed all alternative investments (bonds, equities, as well as currencies exchanged on the black market) other than gold.This suggests that art may be a good hedge against low-probability disasters. The paper further demonstrates that motives to purchase art (consumption and investment) vary over time. In his theoretical model, Mandel (2009) attributes art's low return to the utility derived from conspicuous consumption. In occupied France during WWII, conspicuous consumption was impossible for artworks deemed "degenerate" by the Nazis. The price evolution of "degenerate" versus "non-degenerate" artworks confirms the importance of conspicuous consumption in artworks' pricing. Eventually, the paper defines the concept of discretion, the ability to store a large amount of value in small and easily transportable goods. During wartime, illegal activities and the risk of being forced to flee the country increased the interest for discreet assets as shown by the better performance of small (and thus discreet) artworks in comparison to large ones.

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Section: Resultsmentioning

confidence: 99%

Art as a Wartime Investment: Conspicuous Consumption and Discretion

Oosterlinck

2017

The Economic Journal

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“…So, the spread of phylloxera generated a major income shock. Contemporary estimates made by A. Lalande suggest that phylloxera cost France twice as much as the war indemnity paid to the Germans in 1870 which amounted to 25% of one-year GDP (Ordish, 1972;Occhino et al, 2008). More recently, Pierre Galet estimated that the cost could have been as high as 15 billion francs, that is three times the war indemnity (cited in Simpson, 2011, p. 36).…”

Section: Phylloxera and Income Shockmentioning

confidence: 99%

Stealing to Survive? Crime and Income Shocks in Nineteenth Century France

Bignon

Caroli

Galbiati

2016

The Economic Journal

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International audienceUsing local administrative data from 1826 to 1936, we document the evolution of crime rates in nineteenth century France and we estimate the impact of a negative income shock on crime. Our identification strategy exploits the phylloxera crisis. Between 1863 and 1890, phylloxera destroyed about 40% of French vineyards. We use the geographical variation in the timing of this shock to identify its impact on property and violent crime rates, as well as minor offences. Our estimates suggest that the phylloxera crisis caused a substantial increase in property crime rates and a significant decrease in violent crimes

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“…Decreasing the real wages and a draft of labor to Germany further burdened France. Whereas France required huge budget surpluses to manage the accumulated domestic debt, however, post-Liberation inflation slashed the real debt (Occhino, 2008). Caruana (2007) finds that Spain economically suffered enough to refrain from joining the Axis in wake of successful total embargo on oil for Spain in August 1940 by the Allied forces.Though the wide spread literature support the predominance of the 'resource curse' argument, Di john does not find support for the 'resource curse' argument for associating probable political violence with the resource abundance, especially oil (Di John, 2007).…”

Section: Business Suffering From Warmentioning

confidence: 99%

War Destroys Business A Reality Check

Naseem¹,

Akbar²

2018

Seventh International Conference on Advances in Social Science, Economics and Management Study - SEM 2018

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The study takes on economic aspects of war. Exploring the literature in search of finding any systematic explanation of war and business complexity we found no comprehensive evidence. The study did not have geographical or time barriers in terms of event occurrence though selected literature comes recent and quality publications. Since literature does not provide any mechanism to understand complex and dynamic relationship between war and business, this study proposes a framework to understand these dynamics and invites attention of the scholars to invest time and energy in analyzing the proposed framework for studying different aspects of the war and business relationship. Realizing the complex and dynamic nature of the variables, we assume that every unique combination would have a different outcome. An empirical investigation based on the proposed framework would add to its refinement.

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How Much Can a Victor Force the Vanquished to Pay? France under the Nazi Boot

Cited by 42 publications

References 24 publications

Art as a Wartime Investment: Conspicuous Consumption and Discretion

Art as a Wartime Investment: Conspicuous Consumption and Discretion

Stealing to Survive? Crime and Income Shocks in Nineteenth Century France

War Destroys Business A Reality Check

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