Study title

Why suffered Germany a crisis of unprecedented scale after a promising stabilization of the Mark in 1923/24 and the subsequent increase, and which factors are linked to the disaster?The study ties in with one of the most controversy in the German economic history of the last decades. In the so-called ‘Borchardt controversy’ the researcher Knut Borchardt questioned the traditional interpretation of the seriousness of the global economic crisis of 1929. The usual interpretation was that the depression and finally the following establishment of the Nazi - regime was due by unforced errors in the economic policies of the last Weimar governments, especially the ‘Brüning deflation policy’. This Keynesian-influenced interpretation was opposed by Borchardts supply side inspired view that even before the global economic crisis the German economy had been sick and that the deflation and a balanced budget policy of Bruning resulted from a dilemma. A central objection to Borchard’s interpretation was the question, why only a year after Bruning´s resignation a dramatic shift to an expansionary monetary and fiscal policies could be initiated. A new interpretation of Brünings deflationary policy is presented in shifting the focal point of criticism of the German economic policy in the period of the ‘Dawes-Plan’. This new focus of criticism leads to a new interpretation of the Borchardt-theses on German’s economic policy in recent years of the Weimar Republic. Germany’s undamped foreign indebtedness since 1924 plays a key role in explaining Germany’s crisis and economic situation between the Dawes-Plan and the transfer stop. The central thesis of the investigation is: “The interdependence between Reparation payments and Germany’s economic trend is the lack of stimulus compatibility of the different reparationregimes. There was no reparation arrangement before the Young Plan fo 1929/30, which gave the German side an incentive for a net transfer of resources. Germany underwent...