Germany’s Postwar GrowthEconomic Miracle or Reconstruction Boom？.docVIP

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Germany’s Postwar GrowthEconomic Miracle or Reconstruction Boom？.doc

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Germany’s Postwar GrowthEconomic Miracle or Reconstruction Boom？.doc

Germany’s Postwar GrowthEconomic Miracle or Reconstruction Boom？ GERMANY’SPOSTWARGROWTH:ECONOMICMIRACLEORRECONSTRUCTIONBOOM?RichardReichelDuringthepasttwodecadestherehasbeenaheateddebateaboutthecausesoftheGermanso-calledWirtschaftswunder(economicmiracle)aftertheSecondWorldWar.Thisdebatecamesomewhatunexpectedly,astheGermanwargenerationalwaystookitforgrantedthattheimpressivegrowthrecordinthe1950sand60swasaconsequenceofeconomicliberalizationafter15yearsoftightplan-ningandstateinterventionismundertheNazidictatorship(Buch-1heim1989).Indeed,aftertheintroductionoftheSozialeMark-twirtschaft(socialmarketeconomy)in1948,LudwigErhard,thefirstfederaleconomicsminister,enjoyedalegendaryreputation.Never-theless,Erhardneversawhimselfasa“miracleman.”HealwaysemphasizedthatGermany’srapidgrowthwasduetoasoundeco-nomicpolicy,inparticulartheimplementationofafreeeconomic2system(Erhard1958).Inthe1980s,thisviewwaschallengedbyhistoriansandeconomistswhoarguedthatGermany’spostwargrowthwasessentiallytheresultofareconstructionboomafterthelostwar.ThemainGermanad-vocateofthisreconstructiontheorywasthehistorianWernerAbelshauser(1983).Hequestionedtheimpactofthecurrencyre-CatoJournal,Vol.21,No.3(Winter2002).Copyright??CatoInstitute.Allrightsre-served.RichardReichelisAssociateProfessorofEconomicsattheUniversityofErlangen-Nuernberg.1ErnstDu¨rr(1986:153)summarizedtheviewofliberaleconomists:“ThehigheconomicgrowthinWestGermanyinthe1950swasbasednotoncoincidentallyfortunatecircum-stances,butwastherepeatableresultofaneconomicpolicywhichcreatedtheconditionsofadynamicdevelopmentprocess.”SeealsoKlump(1995).2The“socialmarketeconomy”shouldnotbeconfusedwithawelfarestatenorwithalaissez-faireeconomy.Itsmaincomponentswereastrictorientationtowardpricestability(tightmonetarypolicy),averyrestrictedredistributivesystemofsocialtransfers,aneffec-tivecompetitionpolicy,aliberaltraderegime,andtheabsenceofpriceregulations.Erhardwasconvincedthatamarketeconomyisinherentlysocialandneedsonlyverylittlere-distributivestateactivity.427