What economic reforms occurred in West Germany under Erhard?

Under Ludwig Erhard, West Germany underwent economic reforms known as the "social market economy" and "economic miracle".

Ludwig Erhard, the Minister of Economics and later Chancellor of West Germany, implemented a series of economic reforms that transformed the country's economy in the post-war period. These reforms, collectively known as the "social market economy" or "economic miracle", were instrumental in the rapid recovery and growth of West Germany's economy.

The social market economy was a unique economic model that combined free-market capitalism with social policies to ensure a fair distribution of wealth. Erhard's reforms aimed to create a competitive economy while also providing social security and maintaining a high standard of living for all citizens. This was achieved through a combination of policies, including deregulation, tax cuts, and the introduction of a new currency, the Deutsche Mark.

One of the most significant reforms was the currency reform of 1948, which replaced the Reichsmark with the Deutsche Mark. This move was designed to curb inflation, stabilise the economy, and restore confidence in the German currency. The introduction of the Deutsche Mark was a success, leading to increased savings and investment, and ultimately, economic growth.

Erhard also implemented policies to encourage competition and reduce state intervention in the economy. He abolished price controls and reduced trade barriers, allowing for a more competitive market. These measures led to increased productivity and efficiency, contributing to the economic boom.

In addition to these economic reforms, Erhard also introduced social policies to ensure a fair distribution of wealth. He implemented a progressive tax system, which taxed higher incomes at a higher rate, and introduced social security measures, such as pensions and unemployment benefits. These policies helped to reduce income inequality and ensure a high standard of living for all citizens.

Overall, Erhard's economic reforms transformed West Germany's economy, leading to rapid economic growth and prosperity. His policies of a social market economy and the economic miracle are credited with laying the foundation for West Germany's post-war economic success.