Germany’s postwar boom was financed by money creation, not foreign aid

Evidence

Despite the destruction that its productive apparatus had suffered during World War II, between 1950 and 1960 Germany succeeded in doubling its income per capita. It certainly benefited from a favourable international environment as well as, of course, the Marshall Plan. But its reconstruction was mainly financed with internal resources. In the early 1950s, the household saving rate was less than 4 per cent of GDP (even lower than the standards observed in the poorest countries), while the investment rate was over 20 per cent and even reached 25 per cent in the late 1960s. The gap between savings and investments was filled mainly by the creation of money and the reinvestment of corporate profits. Between 1950 and 1960, the volume of credits increased six-fold, rising from 27 to 55 per cent of GDP. — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 143

Categorization

• XREF: connects to: Germany financed postwar reconstruction mainly through money creation, not household savings; West Germany’s era marked itself by currency reform, not liberation from Nazism — Rolf Wiggershaus, The Frankfurt School: Its History,…, 1911; 1920s German hyperinflation stemmed from WWI debt financing, not stimulus — Mark Blyth, Austerity: The History of a Dangerous…, 162 (+3 more)

Related

• Germany financed postwar reconstruction mainly through money creation, not household savings (similarity 0.97)
• West Germany’s era marked itself by currency reform, not liberation from Nazism (similarity 0.81)
• Germany’s postwar success depended on external macroeconomic favors rarely acknowledged by German policy makers (similarity 0.80)
• 1920s German hyperinflation stemmed from WWI debt financing, not stimulus (similarity 0.80)
• German hyperinflation was not caused by deliberate anti-slump monetary stimulus. (similarity 0.79)
• Poor countries can finance development through domestic money creation (similarity 0.79)
• Germany’s receiving society had to be rebuilt from ruins, unlike France’s intact one (similarity 0.78)