The political economy of post-war Finland, 1945–1952¹

Abstract

The paper is primarily concerned with the Finnish government's management of the Finnish economic situation after the Second World War. Overall, post-war policies were dominated by three main goals, first, how to deal with the war reparation payments required under the harsh political terms of the 1944 Armistice Treaty; secondly, to ensure the settlement of the Karelian refugees and demobilised veterans; and thirdly, the raising of production and the standard of living, including the easing of the rationing system. The focus is especially in analysing how this was financed externally and by the state economy without hyperinflation and considerable indebtedness of the state. From the point of view of the government finances, the financing of the war was transformed to the financing of the war reparations, the compensations due to the war and the settlement of the homeless people. The paper has drawn on the findings of the Studies of the Economic Growth of Finland and other sources and can be seen as a sequel to a previous article on the Finnish war economy between 1939-1945.²