germany- weimar's golden years- german economic stability

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  • German economic recovery (Weimar's golden years 1924-9)
    • performance
      • strengths
        • increased production (1928 levels same as 1913 due to US foreign investment and more efficient methods)
        • lowering costs (due to cartels- coalition of businesses to control market- better purchasing power)
        • increased exports (40%)
        • wage rises (rose every year 1924-30)
        • social welfare (e.g. progressive taxes, working conditions + pensions, health care)
          • local amenities, 2+m houses built, homelessness down 60% in decade
      • weaknesses
        • uneven growth (1926 declined + imports outweighed exports)
        • agriculture decline (income pp 44% below average, grain prod. 3/4 of 1913)
        • unemployment never below 1.3m (1.9m 1929 before WSC)
    • fundamental economic problems
      • discouraged saving and investments (lost savings 1924, relied on foreign investors interested in high interest rates- highly dependent)
      • worrying gov finances (welfare cost 26% GNP, 1925- debt)
        • revenue didn't match expenditure, serious financial implications for econ
      • changing balance of pop. (high pre-war b.r. meant not enough jobs so unemploy. increase)
      • poor world econ conditions (decline in agri. prices, hindered by tariffs, lost resources in ToV territories)
        • 1/3 farmers, couldn't profit after price fall, overall fall in demand
      • a sick economy?
        • problems disguised by foreign investment and devel. of welfare system
        • foreign loans made GR liable
        • investment too low to encourage growth
        • sectors started to slow by 1927
        • faced serious econ difficulties heading for major econ downturn
    • after hyperinflation 1922-3 Rentenmark intro. + Dawes Plan

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