Reparations in the postwar period: a survey

Abstract

Reparations payments over the last century figured prominently in the development of the monetary theory of international trade. More recently, however, the issue of reparations payments has been more or less ignored, even though they have continued to play role in the relations between nations - particularly between the Axis Powers and the Allies of World War II. The present paper considers the static and dynamic benefits of reparations for the economies of both remitting and receiving countries. It is argued that when these gains are taken into account, reparations have been a positive factor in the growth of the world economy since World War II.  The author first outlines the postwar reparations programs of Germany, Italy and Japan. The three programs are then examined from the point of view of their origin, tracing some of the aggregative effects on the economies of the remitting countries. In addition, attention is then paid to the benefits to the recipients. The author concludes with a brief assessment of the overall economic impact of reparations in the postwar period.

JEL: F10, F33, F53