The West German Economic Miracle

Overview

In our tenth and final lecture, we explore the West German economic miracle after World War II, showing how free market ideas transformed a devastated economy into one of the world’s most prosperous. We examine how postwar price controls and rationing led to inefficiency and barter until reforms led by Ludwig Erhard introduced currency reform and removed price controls in 1948. The lecture concludes with the rapid surge in industrial production and sustained growth that followed, and Dr. Henderson illustrates how ideas and economic policies matter more than financial assistance.