What were the reasons for the 'Economic Miracle'? Flashcards
(28 cards)
Who was elected the first Chancellor of the FRG?
Adenauer
What were the problems facing Adenauer to do with the economy?
-recession
-unemployment
-price rises
What were the problems facing Adenauer to do with society?
-need for housing after WW2 deconstruction
-to accommodate refugees
What were the problems facing Adenauer to do with politics?
-FRG still controlled by occupying powers at the start
What were Adenauer’s aims?
-Western integration
-the ‘German question’->reunification but with the capitalist (doesn’t want to include the communists->’Magnet Theory’
What were Adenauer’s aims with economic policy?
-Erhard’s ‘social market’ policy
What were Adenauer’s social aims?
-to create social consensus through concessions (not as important as the other aims)
What is ‘Magnet Theory’?
-attract support from East Germany
-to make the FRG so attractive that the DDR want to join the FRG
What had been the economic impacts of the occupation of Germany?
-humanitarian crisis
-inflation crisis
-Black market economy
What was the humanitarian crisis?
-in the British and American zones they had struggled to come with the humanitarian crisis, large volumes of refugees and former exiles returning
-many people had fled when the Nazis moved in so would want to move back
-women wanted to go back to work after taking over men’s jobs/roles during the war
What was the inflation crisis?
-too much wage and price control to cope with the inflation crisis
What was the Black market economy?
-Black market economy (don’t want) flourished until the introduction of the new currency in 1948 by Erhard
Who introduced the currency reform?
-Erhard in 1948
Who was Erhard?
-Minister of Economics 1949-1963
-Vice Chancellor from 1957
-Chancellor 1963-1966 (after Adenauer)
What were the Social Market Economy aims?
-government getting involved in the economy to help it become more stable
-aims of the social market economy were to increase consumption and therefore cause economic growth
-aimed to combine political and economic freedom with social justice and security
-aimed to get rid of the Black Market
What did Erhard do?
-ended state regulation which led to increased production
-abolished price controls
How did what Erhard did lead to an increase in the economy?
-meant that the prices go down so the production went up so people had more jobs and there was a greater access of products
What was the key aim of the ‘economic miracle’?
-rising consumption and economic growth were the key aims
What was the ‘foundation crisis’? (1949-1950)
despite potential positives there was an initial crisis:
-price rises not matched by wages
-shortages of some resources needed for rebuilding eg coal
-initial increase in imports led to serious balance of payments deficit (lacking)
-lack of foreign currency investment
-high unemployment 13.5% by 1950
What was the Korean War’s impact?
-the Korean War led to an increase in exports to America, providing economic stimulus
When was economic recovery clearly occurring?
-by 1925 economic recovery was clearly occurring
What do they want to do to help the economy?
-want an equal balance of imports and exports to help the economy
What did the Foundation Crisis evidence about the economic miracle?
-the foundation crisis evidences that the economic miracle wasn’t perfect
-there was a volatile period before the economic boom before the economic miracle
Why did the Korean war make such a big difference to Germany?
-it led to an increase in exports to America which provided an economic stimulus
-it led to an increase in exports because Germany’s main exports are machines, cars, tanks, guns etc->German engineering is a lot better than others
