Economic Development Flashcards
What was the Social Market Economy?
- A free market economy, no government interference in the market.
- Social Support for poorest in society.
- Rapid economic growth under this economy created the “Economic Miracle”
Who was the economics minister under Adenauer?
Ludwig Erhard
What economic reforms did FRG undergo?
- The Deutschmark introduced
- Price controls abolished
- 1952 Equalisations of Burdens Act
How did the FRG government boost consumerism?
-Rationing and price controls were abolished, leading to a rise of consumer goods in shops and growing confidence in the economy.
What was the 1952 Equalisation of Burdens Act?
- A law enforcing a tax on people’s assets.
- Money raised distributed to biggest sufferers from the war.
How much did unemployment fall between 1950-1965?
1950: 8.1%
1965: 0.5%
What are the years 1955-1966 called?
The ‘economic miracle’
How much did exports rise (1950-1970)?
8000 million marks -> 125,000 million marks
Why did the economy recover rapidly?
- Korean war and demand for industrial goods
- Refugees and expanding workforce
- New investment of German businesses
How many ‘guest workers’ came to the FRG in the 1950s?
Roughly 3.6 million
Why was there an economic recession in 1966 and 1967?
Government spending rose dramatically
How did the government respond to the recession?
- Introduced cartels to control prices
- 1967 Economic Stabilisation Law (5 year plan for spending)
- 1968 provision added to Basic Law - government had more control over Lander spending
What was an impact of the oil crisis? and how was it dealt with?
- Unemployment
- Ban on recruiting ‘guest workers.’
- Measures to reduce oil consumption.
Overall, did standards of living rise or fall between 1949 and 1989?
Rise
What proportion of houses were damaged after the war?
1/3
