Question

What were the major factors responsible for economic crisis in Germany during 1980s?

Answer 1

The (West) German Social market economy (SME) has been trying to merge an approach to pursue open markets with functioning competition wherever possible with a concern to preserve price stability and social justice in society (cf. Funk 2000). In retrospect, the SME-approach has proved more or less compatible with three key principles, namely maintaining a large share of exports and imports, an unwavering commitment to price stability and a European vocation of the governing class at least. Recently, these features of the (west) German prosperous economy were named a “self reinforcing iron triangle”, because “the key principles were derived from the traumatic failures of earlier German polities, notably the Great inflation of 1923 and murderous and ultimately self-destructive Nazi regime” (Paterson 2011,