Publication Date

Spring 3-31-2019

School

School of Business

Major

Business: International Business

Keywords

Wirtschaftswunder, Allies, Ludwig Erhard, Marshall Plan, West Germany

Disciplines

International Business

Abstract

The purpose of this paper is to analyze the West German economy to find the reason for “Wirtschaftswunder,” the German economic miracle, and contrast the decisions made after WWII to those made after WWI. The approaches of foreign powers in these periods are also analyzed. After WWI, the subsequent hyperinflation and economic collapse is mainly found to be a result of poor economic decisions within German institutions, although the collapse was almost certainly supplemented by poor foreign policy decisions by the Allied Powers. Wirtschaftswunder was made possible by Ludwig Erhard’s reforms, which are found to have been much more important to West Germany’s success and successful denazification than the Marshall Plan. The best plan for economic recovery for Germany was one of least economic interference. In the years immediately following WWII, the Allied Powers were extremely influential in governmental institutions, but this was only to help stabilize the devastated country for a short period of time after the war and help rebuild its political institutions so it could return to self-governance. West Germany’s economy was allowed to grow, unhindered by large reparations payments, catching up to its productivity capacity that was never truly eliminated by Allied bombing during the war.

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