Since the mid-1970s, German economic historians have been researching the history of the so-called “economic miracle,” that was the approximately three decades after WWII that were marked by remarkably high economic growth. It was and still is controversial whether the German economy after WWII has embarked on a new growth path, possibly caused by the transition to a social market economy, or whether Germany has returned to a long-term unchanged development path. If this is the case, then the German economy would first have to show high growth rates because the growth rates during the war were comparatively low. After completing a reconstruction phase, Germany then returned to the path of normal economic development. In the present monograph, Tamás Vonyó presents diverse and convincing evidence that there was no economic miracle in Germany after WWII, but only a return to the established economic level and later growth path of the pre-war period.

Between introduction and conclusion, Vonyó develops his argument in five chapters. First, he examines the initial situation in the years 1945/1949. How did the capital stock and the standard of living develop during the war and in the immediate post-war period? It turns out that, despite bombardment and war destruction, the capital stock at the end of the war was larger and more modern than in the pre-war period (p. 20) and that well-trained workers were abundantly available in West Germany because many Germans fled from Soviet-occupied territories (p. 31). Only the destruction of the transport infrastructure and restrictions of the occupying powers initially prevented better use of existing resources. At the same time, the United States in particular contributed considerably to stabilizing the economy and society by supplying extensive amounts of food.

In the second chapter, Vonyó presents a very convincing and innovative study of the geographical dimension of economic development. In doing so, he works out that the supply of housing has been a central bottleneck factor for economic development. Vonyó makes a significant contribution to the literature with this convincingly substantiated thesis. So far, the literature has been dominated by the view that the existing production capacities remained partially unused as a result of the destroyed transport network and that the reconstruction of railway lines and inland waterways was a decisive factor for the economic miracle. Vonyó now shows that, over a long period of time, substantial investment in urban housing was necessary to get the economic miracle going. He also presents evidence that the numerous refugees living in the countryside have led to investments, that is, companies have not only been reconstructed in the established industrial centres, but have also been established in the countryside.

In the third chapter Vonyó draws up a growth balance of the German economy. Here he focuses on the industrial sector, for which he compiles figures for production, labour and capital input and from which he estimates the development of total factor productivity. On the basis of these calculations he also reveals the limits of growth. It has traditionally been stressed that investment has been a driving force behind the economic miracle and that this force was essential until the late 1960s. Vonyó sees the decisive turning point as early as the 1950s.

In the fourth chapter, Vonyó explores the international dimension and in particular the importance of the export economy for German economic development. Here too, he deviates from established narratives because he proves that the role of the export economy has not always been important, but has fluctuated in its significance. In the early years, the Marshall Plan period, the reconstruction of foreign trade relations was important. Subsequently, however, the domestic economy dominated and only after the founding of the EEC did a groundbreaking reorientation of German foreign trade relations take place (p. 150). The fifth chapter examines four fields of economic policy (the new economic order of a social market economy, the Marshall Plan, fiscal policy and monetary policy) and their potential effects on economic growth. Traditionally, economic reforms and, in particular, the introduction of the DM have been considered to have a decisive effect. Vonyó sees economic policy more as an accompanying role and emphasizes the path dependencies on pre-war economic policy.

All in all, this is a very good and useful book. Vonyó sums up the extensive German-language literature for international readers very well and he also comes up with his own innovative interpretations. These are always based on intuitively plausible economic considerations and are underpinned descriptively and econometrically the extensive use of official statistics. To readers who are interested in the German or European economic history of the twentieth century I can definitely recommend this book.