West German economy and the economic miracle

What was food production like in 1947?

Was only 51% of that in 1938, and industrial output only 38%.

What did the Allies initially prevent?

The rebuilding of the German economy, and even dismantled the German steel industry.

How much did reparation costs take away?

$10billion, which damaged the economy further.

However, what was there a gradual realisation of?

A gradual realisation that unless the German economy recovered, the European economy could not recover, and in the 1950s, there was what has been described as an economic miracle.

What happened to industrial production in this period?

It rose, resulting in higher wages.

How much did incomes go up during this period?

Incomes went up 400% between 1949 and 1963.

What was GNP (Gross National Product) like in this period?

Growth rates were about 8% in the 1950s.

What happened to unemployment during this period?

It fell from 8.1% (2 million) in 1950 to 0.5% in 1965.

What did economic recovery start with?

The creation of Bizonia in 1947 and with economic policies introduced before 1949.

What economic policies were introduced before 1949?

• Removing price controls, which stimulated business by allowing free competition between private enterprises.

• Removing controls over wages and production, allowing workers a role in management and decision-making which resulted in fewer strikes.

What was ended before 1949?

Inflation was ended through currency reform.

What was reduced before 1949?

Reduced marginal tax rates, so that those on higher incomes had more money to spend on goods.

What did these policies before 1949 encourage?

Encouraged people to work and were reflected in a decline in absenteeism.

What was industrial production like in Bizonia?

The index for industrial production had risen from 51% in June 1948 to 78% by December.