Abstract

The "monetary circuit" was an important part of Italian economic policy between Ethiopia invasion (1935) and the end of fascism (1943). Most of the economic literature sustains that the "direct circuit" (from the market to the Treasury) functioned rather well until 1942, with a turning point in 1943 with the appearance of "indirect circuit" (market-banks-Bank of Italy-Treasury). My quantitative analysis indicates that the real breaking point occurred in 1940, as opposed to 1943, and further accounts for the features of the monetary circuit, that from 1935 based on "indirect circuit" between "Cassa Depositi e Prestiti" and banks, on one hand, and Treasury, on the other hand.