Government Policies and Growth Factors

The German economic recovery was supported by multiple government initiatives and external factors. The creation of work schemes in 1950 and the Investment Aid Law of 1952 provided 3.2 billion in industrial development support. The Korean War created demand for German munitions, while limited military expenditure allowed resources to be directed toward economic growth.

Vocabulary: Antitrust Law - Legislation preventing the formation of business monopolies or cartels to ensure fair competition.

Highlight: Co-determination policies allowed workers to participate in management decisions, reducing industrial tensions.

Example: Germany's geographical advantages, including access to seaports and raw materials, contributed to trade success.

Period of Economic Challenge (1966-1989)

The economic miracle faced challenges in the mid-1960s when wages and government spending outpaced production. The period saw significant reforms including the Stabilization Law of 1967 and amendments to Article 109 of the Basic Law.

Definition: Stabilisation Law - Legislation formalizing cooperation between employers, employees, and state intervention during economic crises.

Example: Government budget doubled between 1955-1965, contributing to economic pressures.

Brandt's Social Reforms

Significant social welfare improvements were implemented under Brandt's leadership. These included pension increases, expanded healthcare coverage, and substantial increases in education funding.

Highlight: Education expenditure increased by 300%, while social welfare spending rose from 25% to 33%.

Example: Pension reforms included 5% increases for wounded veterans and 16% for widows.