Why We Are Here > Economics & Investing

The World’s 10 Largest Economies by GDP (1960-Today)

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Mackin USA:
Animation

http://www.visualcapitalist.com/animation-the-worlds-10-largest-economies-by-gdp-1960-today/

Chunkford:
That was more exciting than the grand national :D - https://en.wikipedia.org/wiki/Grand_National

What happened in 1970 for Germany to come from nowhere?

ergophobe:

--- Quote from: Chunkford on November 23, 2018, 02:04:16 PM ---What happened in 1970 for Germany to come from nowhere?

--- End quote ---

That is an interesting question.

I think the first answer is that there is a problem with the data. If you look at a chart from the same website, it looks like Germany already exceeded the GDP of several top 10 countries by 1960
http://www.visualcapitalist.com/2000-years-economic-history-one-chart/



The second answer is - nothing special. German GDP was was exploding from 1948 until basically now. 1970/71 on fundamentally the same trajectory except for a couple of boom/bust periods.
https://www.worldeconomics.com/GrossDomesticProduct/Germany.gdp



The pace in 1970 was nothing compared to the gains right after the war, but then Germany had an educated workforce that knew how to run an industrial economy, but for the fact that it was in shambles. So it was much easier to achieve regrowth than growth:

--- Quote ---Between June and December of 1948, industrial production in the three Western zones increased by an astounding 50%.
--- End quote ---
https://www.cato.org/publications/commentary/german-miracle-another-look

This is part of a larger story that has some hilarious quotes from Ludwig Erhard, director of the bizonal Office of Economic Opportunity:


--- Quote ---Journalist Edwin Hartrich tells the following story about Erhard  and Clay [U.S. General Lucius D. Clay, military governor of the U.S. zone]. In July 1948, after Erhard, on his own initiative, abolished rationing of food and ended all price controls, Clay confronted him:

Clay:“Herr Erhard, my advisers tell me what you have done is a terrible mistake. What do you say to that?”

Erhard:“Herr General, pay no attention to them! My advisers tell me the same thing.”

Hartrich also tells of Erhard’s confrontation with a U.S. Army colonel the same month:

Colonel:“How dare you relax our rationing system, when there is a widespread food shortage?”

Erhard:“But, Herr Oberst. I have not relaxed rationing; I have abolished it! Henceforth, the only rationing ticket the people will need will be the deutschemark. And they will work hard to get these deutschemarks, just wait and see.”

Of course, Erhard’s prediction was on target. Decontrol of prices allowed buyers to transmit their demands to sellers, without a rationing system getting in the way, and the higher prices gave sellers an incentive to supply more.
--- End quote ---

Back to 1970... as I say, it doesn't look like anything particular was happening other than "normal" German growth and some data gap in the video.

Other things happening around then...


--- Quote ---Willy Brandt kneels down at the monument to the victims of the Warsaw Ghetto. It is 7 December 1970 and the picture goes round the world. It becomes a symbol of Germany’s appeal for reconciliation, 25 years after the end of the Second World War. On the same day, Brandt signs the Treaty of Warsaw between the Federal Republic and Poland. It lays the foundation for a new peace architecture as one of a series of treaties with eastern Europe.
--- End quote ---
https://www.deutschland.de/en/topic/politics/germany-europe/30-german-years-1950-1980




--- Quote --- In 1953 it was decided that Germany would repay $1.1 billion of the aid it had received. The last repayment was made in June 1971
--- End quote ---
https://en.wikipedia.org/wiki/Wirtschaftswunder

littleman:
Great analysis Ergo.

I'd like to see a similar race for per capita GDP.

ergophobe:

--- Quote from: littleman on November 23, 2018, 09:41:24 PM ---I'd like to see a similar race for per capita GDP.

--- End quote ---

In looking for the charts above, I saw some per capita GDP data. I think a couple of searches would get you there. I saw some better ones. These have some data, but nothing quite as sexy as the original video

https://en.wikipedia.org/wiki/List_of_regions_by_past_GDP_(PPP)_per_capita#1%E2%80%932008_(Maddison) (sortable)

https://www.nationmaster.com/country-info/stats/Economy/GDP-per-capita-in-1973

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