Abstract

The existing literature has underlined the existence of widespread economic regularities in the stabilization processes of the Twenties. This paper shows that there were also political regularities. The main reasons of these regularities are explained in the light of a political exchange hypothesis according to which interest groups express a demand for inflation (or deflation), while political parties aim at catching power, representing the interests of some groups. A political equilibrium is a situation where some party or a coalition of parties gains the consensus of prevailing interest groups.