From Franc Faible to Franc Fort: Twelve Years of French Economic Policy

Published 01 Sep 1996
Reference 4567
Region Europe
Summary

This case focuses on macroeconomic policy in France during the period 1981-93. The early socialist attempt at re-inflating the economy during 1981-82 is critically reviewed, suggesting lessons that go beyond the case of France. The case then reviews the Franc’s stabilisation and the concomitant rise in unemployment over 1983-93.

Teaching objectives

The case is designed to illustrate the key trade-offs in macroeconomic policy, the logic of government choices and their impact on business. The case also serves as a useful introduction to a discussion of Economic and Monetary Union (EMU) issues including the Single Currency and the Maastricht convergence criteria.

Keywords
  • AR1996
  • FRANC FORT
  • FRANC FAIBLE
  • FRENCH ECONOMIC POLICY