Which led to the 1937 recession
Mining crisis and recession
In the mid-1960s, the Federal Republic was regarded as a "paradise of prosperity with small flaws". The German citizens have got used to constant economic growth, full employment and a high standard of living. The economic recession of 1966/67 fueled an exaggerated fear of crisis and, in addition to the primarily structural crisis in the Ruhr, contributed significantly to the overthrow of Ludwig Erhard. The implementation of new economic policy concepts under the grand coalition leads to a rapid and sustained economic recovery.
In order to effectively counter the labor shortage during the economic boom, the industry began to recruit "guest workers" and women in the first half of the 1960s. But the downward trend in growth rates is already signaling the end of the "fat" years. Due to a decline in willingness to invest, a clear economic weakness became noticeable in 1966, which resulted in wage cuts and layoffs. In 1967 there was "negative economic growth" for the first time. The gross national product falls by 0.2 percent, while the unemployment rate increases from 0.7 to 2.2 percent.
Confident in the self-regulation of the market, Chancellor Erhard rejects any directing intervention by the state in the economic process. Only the grand coalition will succeed in overcoming the recession. State investment programs provide immediate measures for a rapid economic recovery. With the Stability Act of May 10, 1967, a comprehensive set of instruments for global control is introduced in order to be able to combat economic fluctuations more effectively. In addition, representatives of the state and the collective bargaining parties meet under the name "Concerted Action" in order to coordinate their economic interests.
(ahw) © Foundation House of the History of the Federal Republic of Germany
Text: CC BY NC SA 4.0
Hinz-Wessels, Annette: Mining Crisis and Recession, in: Lebendiges Museum Online, Foundation House of the History of the Federal Republic of Germany,
URL: http://www.hdg.de/lemo/kapitel/teilees-deutschland-modernisierung/bundes Republik-im-wandel/bergbaukrise-und-rezession.html
Last visited on: 24.05.2021
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