This paper aims to assess Modigliani’s contribution to the American post war debate over price controls and economic stabilization. We will focus on his unpublished “Plan for meeting the domestic meat shortage without price control and rationing”. Elaborated by Modigliani in the Summer of 1947 the plan was designed to cope with meat shortage arising from crop failures aggravated by the implementation of the European Recovery Program. It was based on a system of taxes and subsidies aiming to realize a proper distribution of disposable income and to warrant a minimum meat consumption without encroaching market mechanisms and consumers’ freedom. In the paper we will describe the contents of the plan and its further refinements, the comments and reactions from economists, economic advisers and politicians, the reasons for its failure. Finally we will try to assess the importance of this proposal in Modigliani’s professional career and in the development of his approach to Keynesian economics.
|Number of pages||69|
|Publication status||Published - 2010|