Germany and its Economy

Germany and its Economy

Known as the "fair" capital, Germany lies in the center of Europe and

in the center of the European home market. Approximately two thirds of

the top international fairs take place in Germany. Germany is

successful. A leader in world trade, Germany is the third largest

economy in the world and the biggest market in Europe. It wasn't

always this way though; European power struggles wounded the country

in two devastating World Wars in the first half of the 20th century

and left the country dominated by the victorious Allied powers of the

US, UK, France, and the Soviet Union in 1945.

Germany has been through all of the phases of the business cycle many

times. It even suffered immense depression after World War One in the

early 20th century. The Treaty of Versailles dug a deep hole in

Germany's economy because the Allies had gotten a little greedy with

their revenge. Payments made by Germany to the Allies represented a

drain of capital that would have otherwise been directed toward the

growth of German industry. In order to pay its debts for World War I,

Germany engaged in a huge "hyperinflation" of its currency, printing

paper marks until, in 1923, when they became worthless. The

destruction of the currency wiped out the people's savings, which

meant that there would be very little capital available within the

German economy for years to come. With Adolf Hitler rising to power in

1933, the German economy became increasingly socialized and

militarized, passing through recovery to prosperity, which scared

their foreign investors and made a healthy economic recovery

nonexistent.

Germany is referred to as a "social" market economy and remains a key

member of Europe's economic, polit...

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...Germany is doing well other than a few

scarcities. Because they are the third leading economy in the world,

they rank up there with the U.S.and France. Germany has a few

shortages in labor and energy, but overall they succeed in exports and

GDP growth. Germany is an economy not much different than our own.

Besides both being defined as market economies, Germany and the U.S.

also share the same periods of business cycle changes. They both

experienced the Great Depression in the 1920's and '30s and are even

witnessing a recession now. I would agree that an economy is just like

a business. An economy goes through the same downfalls and good times

just like a business, an economy experiences depressions, recessions,

recoveries and prosperities and the goal of an economy is to have a

surplus of money while supplying its citizens with needed goods and

services.