How accurate is it to say that following 1945 the economy of the FRG was successful?
- Created by: olivia_insane
- Created on: 29-01-18 08:08
View mindmap
- Was the FRG economy continually successful from 1945-1989?
- Initial success in the late 40s
- Mostly focused on ec. recovery
- Marshall Aid, Abolishing price controls, new currency, Nazi infrastructure
- 20th June 1948 --> Deutschmark
- Relaxation on rationing
- Debts up to RM400billion wiped out
- But savers had a low exchange rate (RM100 to DM6.5)
- Banks given loans
- 2 million unemployed
- Inflation rising!
- Marshall Aid, Abolishing price controls, new currency, Nazi infrastructure
- 1947: 33% of 1938 industrial output
- Mostly focused on ec. recovery
- Economic Challenges (1966-73)
- Mid 60s
- Recession and slow growth
- Grand Coalition is formed
- Erhard
- 10% spending cuts
- extra working hour
- no effect, global demands are too high
- 10% spending cuts
- no effect, global demands are too high
- Breaks down in Nov. 1966, due to Erhard resignation and disagreement over dealing with the recession
- Erhard
- Risk of inflation (prices rise by 4% in 1966)
- Prices rise more than productivity
- Grand Coalition is formed
- Recession and slow growth
- 1966
- Erhard
- extra working hour
- no effect, global demands are too high
- no effect, global demands are too high
- extra working hour
- Erhard
- Late 60s
- CDU/CSU: SPD Coalition
- FIRST EVER ECONOMIC PLAN
- Dec. 1967 --> Five Year Financial Plan
- Stabilisation Law (co-operation)
- Article 109 of B. Law is ammended to give gov. control over state taxes and policies
- Consequences
- 6% industrial growth per annum
- 1969: Inflation down to 1.5%
- Collapses in 1969 revaluation
- FIRST EVER ECONOMIC PLAN
- CDU/CSU: SPD Coalition
- 70s
- SPD:FDP Coalition
- Willy Brandt
- Brings in social reforms
- 1973 OIL CRISIS
- Raise prices of oil due to high demand and hostility with the West (prices up 70%, output down by 5%)
- Consequence
- 1973: $692 million deficit from a surplus in 1972
- Unemployment up to 4.6% from 1.2%
- Mid 60s
- 80s
- Resilience of the economy
- Advertising and government action ups exports :)
- Government
- Invest in Nuclear Energy
- European Monetary System (ties EEC to Germany)
- Private sector investments (DM7-8bill)
- Abolished legislative measures to merging firms
- KOHL
- SOCIAL MARKET ECONOMY
- Growth was at an avg. 3.6%
- Unemploy. at 7.6%
- Public ag Untitled ainst privitisation so they had faith in the FRG
- Budget increases capped at 3%
- SOCIAL MARKET ECONOMY
- 1986: Inflation is less than 1%
- Exports rise to DM134billion in 1989
- Provided 25% of the budget for the EEC (was the driver
- Resilience of the economy
- Economic Miracle of the 50s, and maintainance into the 60s
- 1949-55: Salaries rise by 80%
- 25% growth (due to longer hours of work and ...)
- 1949-55: Salaries rise by 80%
- Social Market economy
- Businesses set their own wages and prices
- Government only intervenes if people are vulnerable with SOCIAL WELFARE
- Evidence of success
- Productions quadrupled in 10 years (48-58)
- 10 year stats for Unemployed: 11% -- 1.3%
- 10 year stats for: Savings: 3.2% - 9%
- Businesses set their own wages and prices
- Maintaining the Miracle
- Government
- Work creation schemes
- Anti-trust Law dismantles cartels
- Banking controls (no hyperinflation)
- Rebuilding programmes
- Other factors
- Growing world economy
- No defence spending
- Korean War = demand for economy
- Marshall Aid ---> 1.5 billion
- Government
- Evidence
- 60s = full employment and no unrest
- S.O.L = ^
- Trade deficit of DM3.6 billion is now a profit!
- Consequence: 3rd largest economy (trade deficit of DM3.6 billion is now a profit) 60s
- Initial success in the late 40s
Comments
No comments have yet been made