Federal Republic of Germany (West Germany): Chapter 4A. Character and Structure of the Economy
Chapter 4A. Character and Structure of the Economy
The Federal Republic of Germany (West Germany or Federal Republic)
possesses a highly industrialized and productive economy and in the early
1980s was usually ranked fourth among the industrial nations of the world.
In 1980 the total output of goods and services amounted to the equivalent of
US $826 billion, a per capita gross national product of US $13,410-some 16
percent above that of the United States. The population was cared for by
extensive and expensive social programs that had been in existence for about
a century. Economic growth depended almost completely on private initiative,
and management of the economy was largely by free market forces. Foreign
trade played a key role. Few natural resources and limited agricultural land
required large imports of food, raw materials, and manufactured goods. West
Germany was the world's largest importer of agricultural products. A
relatively small domestic market and the need to pay for imports required
a high level of exports, most of which were manufactured goods of high
quality and advanced technology. West German industry competed successfully
in world markets, and the deutsche mark remained one of the world's strongest
In the 1950s and 1960s the economy expanded rapidly, astounding many
inside and outside the country. After the mid-1970s, however, growth slowed
and prices increased while unemployment remained high, prompting West Germans
to question whether the cause was business cycles, international factors, or
structural deficiencies in the domestic economy. In 1981 the debate continued
as the economy declined, even if only marginally. By the end of 1981
unemployment reached levels the country had not experienced for nearly three
decades, and inflation...