P5- Economy Flashcards
germany’s source of economy before WW1 (in strong state)
-natural resources - coal + iron // - advanaced indutrisal base - engineering
evidence to show total wars effect on Germany
-loss of resources from Saar - 16% decline coal + world trade collapsed
too much money chasing too few good meant that?
- higher wages –> increase production cost –> prices go up for wages (inflationary spiral)
Causes German inflation split into 3
-long term (WW1) / medium term (welfare + reparation) // short term (Cuno passive resistance in resp. occupation Ruhr
LT - How did Imperial germany finance war ? (stats)
-16% tax rest borrowed
How did Imperial germany finance war ?
-war bonds - public invest in gov + print money
LT - employment after war
-less focus on consumer goods in war = high demand and low stocks drove up prices
how did Volker Bergahn refer to germany post war economy
unholy mess’
MT- what’s balancing the budget
-gov does not spend more than raises in revenue (gov opts against) adopts policy of deficit financing
MT- whats deficit financing - solved what problems ?
-increase nations debt by reduce tax –> ppl have money to spend = work for demobilised troops (BUT ALLOW INFLATION TO CONTINUE)
what were reparations to be payed in ? - what did german gov do?
-hard currency (6600 MILLION) - german gov print marks + sell to obtain hard currency (not effective)
short term causes - french in vade ruhr when w/ how many troops
-jan 1923 w/ 60,000 troops
what policy does Cuno adopt - means what and results in
-passive resistance - ppls on strike - costs german gov twice what reparations would have
neg consequences
- not tax from workers + no coal exports == aug 1923 mark worthless
new coalition founded under who ?
-stresseman
