Economic Policy Flashcards
Who was the financial mastermind behind the new economic policy?
Hjalmaar Schacht
What was deficit financing?
Government financing spending by borrowing money
When was Schacht minister of economics?
1934-37
What policies were adopted?
- Low interest rates
- debts rescheduled
- assistance to farmers and small businesses
- public works schemes
What public works schemes were introduced?
Public building, mototways, land reclamation, reforestation
How much did government expenditure rise between 1933-36?
70%
What was a balance of trade deficit and what was the result of this?
Importing more goods than are being exported, short of money
What happened to unemployment?
Decreased
When was the ‘New Plan’ introduced?
September 1934
What were the terms of the ‘New Plan’?
- Government control over tariffs, capital and exchange rate
- Government decided on imports
- Bilateral trade treaties (SE Europe)
- Mefo bills introduced
What were Mefo Bills?
I-O-U bills/credit notes
What did the plan hide?
Balance of payment problem
What did Schacht want?
Reduce arms expenditure and increase production of industrial goods
What was the ‘guns or butter’ debate
Debate focused on whether Germany should focus on goods or rearmament.
What was Goering’s economic agenda called?
The 4 year plan
