Germany and its Economy Essay -- Economics

Germany and its Economy Known as the "fair" capital, Germany lies in the center of Europe and in the center of the European home market. Approximately two thirds of the top international fairs take place in Germany. Germany is successful. A leader in world trade, Germany is the third largest economy in the world and the biggest market in Europe. It wasn't always this way though; European power struggles wounded the country in two devastating World Wars in the first half of the 20th century and left the country dominated by the victorious Allied powers of the US, UK, France, and the Soviet Union in 1945. Germany has been through all of the phases of the business cycle many times. It even suffered immense depression after World War One in the early 20th century. The Treaty of Versailles dug a deep hole in Germany's economy because the Allies had gotten a little greedy with their revenge. Payments made by Germany to the Allies represented a drain of capital that would have otherwise been directed toward the growth of German industry. In order to pay its debts for World War I, Germany engaged in a huge "hyperinflation" of its currency, printing paper marks until, in 1923, when they became worthless. The destruction of the currency wiped out the people's savings, which meant that there would be very little capital available within the German economy for years to come. With Adolf Hitler rising to power in 1933, the German economy became increasingly socialized and militarized, passing through recovery to prosperity, which scared their foreign investors and made a healthy economic recovery nonexistent. Germany is referred to as a "social" market economy and remains a key member of Europe's economic, polit... ...Germany is doing well other than a few scarcities. Because they are the third leading economy in the world, they rank up there with the U.S.and France. Germany has a few shortages in labor and energy, but overall they succeed in exports and GDP growth. Germany is an economy not much different than our own. Besides both being defined as market economies, Germany and the U.S. also share the same periods of business cycle changes. They both experienced the Great Depression in the 1920's and '30s and are even witnessing a recession now. I would agree that an economy is just like a business. An economy goes through the same downfalls and good times just like a business, an economy experiences depressions, recessions, recoveries and prosperities and the goal of an economy is to have a surplus of money while supplying its citizens with needed goods and services.