Economic miracle in the West

What advantages did the West have?

It possessed raw materials, had not suffered as much damage in the war as was feared and had not as many reparations taken as in the East.

What meant that the West could meet demands of occupying forces?

The work ethic of the population and the availability of cheap labour from the East.

What provided further stimulus?

Marshall Aid, although historians now question its importance.

What did Marshall Aid bring in?

Brought in only $2 billion by October 1954, and in 1948-49 provided less than 5% of German national income.

What were the Germans also paying at this time?

Paying reparations and restitution funds to the Allies.

When was the Korean War?

1950-53.

What impact did the Korean War have?

Increased the demand for goods the Ruhr could supply.

What helped the increase in demand for goods from the Ruhr?

The fact that other nations were unable to supply war materials, with the result being that exports doubled.

What else may have helped the economic miracle?

Government policies, although historians disagree on this.

What did Ludwig Erhard develop?

The ‘social market economy’, combining government legislation and capitalism to produce ‘prosperity for all’.

What did the economic recovery help to provide?

Political stability.

What happened as a result of this political stability?

Adenauer remained in power from 1949 until his resignation in 1963.

How much had all industry increase by 1959?

A 79.8% increase since 1950.

How much had mining increased by 1959?

A 58.1% increase since 1950.

How much had production of consumer goods increased by 1959?

Increased by 86.1% since 1950.

How much had food production increased by 1959?

Increased by 80.5% since 1950.