Germany financed postwar reconstruction mainly through money creation, not household savings

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 (#corroborates, via linked claim)

Categorization

• XREF: connects to: Germany’s postwar boom was financed by money creation, not foreign aid — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 143; West Germany’s era marked itself by currency reform, not liberation from Nazism — Rolf Wiggershaus, The Frankfurt School: Its History,…, 1911; The German Miracle stemmed from postwar rebuilding, not pro-market reforms — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin: The Making…, 588 (+1 more)

Related

• Germany’s postwar boom was financed by money creation, not foreign aid (similarity 0.97)
• West Germany’s era marked itself by currency reform, not liberation from Nazism (similarity 0.81)
• The German Miracle stemmed from postwar rebuilding, not pro-market reforms (similarity 0.80)
• Germany’s receiving society had to be rebuilt from ruins, unlike France’s intact one (similarity 0.80)
• Poor countries can finance development through domestic money creation (similarity 0.78)
• Germany’s postwar success depended on external macroeconomic favors rarely acknowledged by German policy makers (similarity 0.78)

Broader Connections

• Germany’s postwar boom was financed by money creation, not foreign aid #corroborates (0.80) — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 143