jan 1, 1960 - 1960s economy

Description:

Causes of recession:
-Stretched economy and issues of finding new workers
-There was a drop in GDP in 1965 of 2.9% and in industrial growth in 1.2%
-By 1966, inflation was at 4%
-The post war boom was coming to an end

Government action:
-Gastarbeiter were encouraged - there were 150,000 in 1959, 1.2m in 1966 and they made up 70% of the workforce in the 70s.
-The SPD said the CDU spent too much on modernising railways
-Spending cut by 10% in 1965
-There was more government action under Kiesinger's Grand Coalition:
-1967 Stabilisation Law increased the power of the federal government, decreased the power of individual states, increased taxes and decreased Grand Coalition spending
-Continued agricultural support and integration with Europe

Impact of government action:
-1966, Erhard resigned due to recessionary crisis
-1967, the budget was balanced and in 1968 unemployment was decreasing, industrial growth was a 6% and in 1969, inflation was at 1.5%

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