ELI5-How did Germany go from losing two world wars to being the economic powerhouse of Europe?
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Economists such as Wilhelm Röpke inspired Germany’s “social market economy” approach, which was implemented by the economy minister Ludwig Erhard. The long postwar dominance of the Christian Democratic party made possible a consistent economic policy.
The 1948 monetary reform played a critical role: when the new Deutsche Mark was made available, wages, prices, and rents were kept at the same amounts as before, but both savings and debts were wiped out 90% or more. This made concrete economic activity the center of the economy, and within days shortages were alleviated.
https://www.cato.org/cato-journal/fall-2019/1948-german-currency-economic-reform-lessons-european-monetary-policy
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