IDEAS home Printed from https://ideas.repec.org/p/diw/diwwpp/dp1473.html
   My bibliography  Save this paper

Work Creation and Rearmament in Germany 1933-1938: A Revisionist Assessment of NS-Economic Policy Based on Input-Output Analysis

Author

Listed:
  • Rainer Fremdling
  • Reiner Stäglin

Abstract

We try to measure the impact work creation programs and rearmament had on employment and production of the German economy before World War II. Theoretically based on an extended version of the conventional input-output analysis, our model or analytical framework integrates the Keynesian multiplier into Leontief´s traditional model. Empirically, we apply our recently presented input-output table of Germany for the benchmark year of 1936. Putting together the effects of both work creation proper and rearmament demonstrates that more than one million jobs were created here as early as 1933. And in 1934 and 1935, even three to four million people were employed in this manner. Several hundred thousand and later millions of jobs profited from the additional income spent on consumption. In the years from 1936 onwards, the enormous increase to five million and more for armament production alone was accompanied by additional employment and measures to restrict additional consumption. Of course one can speculate about the counterfactual scenario of whether or not such an upswing would have taken place without Hitler´s economic policy. It is true that the turning point of the business cycle had been passed in 1932, thus before Hitler had become chancellor and maybe it is also true that work creation programs and rearmament were not a necessary condition to achieve full employment as early as 1936/37. On basis of our reassessment, however, we can safely claim that they were a sufficient condition for this purpose. In more general terms, our reassessment rather supports the former view put forward, e. g. by Overy that the NS-regime introduced “a wide range of government policies designed to augment and speed up the existing recovery”. We would, however, modify his chronology, that rearmament became increasingly important from 1936 onwards: rearmament actually gathered momentum as early as 1934.

Suggested Citation

  • Rainer Fremdling & Reiner Stäglin, 2015. "Work Creation and Rearmament in Germany 1933-1938: A Revisionist Assessment of NS-Economic Policy Based on Input-Output Analysis," Discussion Papers of DIW Berlin 1473, DIW Berlin, German Institute for Economic Research.
  • Handle: RePEc:diw:diwwpp:dp1473
    as

    Download full text from publisher

    File URL: https://www.diw.de/documents/publikationen/73/diw_01.c.502764.de/dp1473.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Degler Stephanie & Streb Jochen, 2008. "Die verlorene Erzeugungsschlacht: Die nationalsozialistische Landwirtschaft im Systemvergleich," Jahrbuch für Wirtschaftsgeschichte / Economic History Yearbook, De Gruyter, vol. 49(1), pages 161-181, August.
    2. Ritschl Albrecht, 2003. "Hat das Dritte Reich wirklich eine ordentliche Beschäftigungspolitik betrieben?," Jahrbuch für Wirtschaftsgeschichte / Economic History Yearbook, De Gruyter, vol. 44(1), pages 125-140, June.
    3. Cohn, Raymond L., 1992. "Fiscal policy in Germany during the Great Depression," Explorations in Economic History, Elsevier, vol. 29(3), pages 318-342, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Fremdling, Rainer, 2018. "Statistik und Organisation der NS-Kriegswirtschaft und der DDR-Planwirtschaft 1933-1949/50 [Statistics and Organization of the NS-War Economy and the East-German Planned Economy 1933-1949/50]," MPRA Paper 87664, University Library of Munich, Germany.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Albrecht Ritschl, 2005. "Der späte Fluch des Dritten Reichs: Pfadabhängigkeiten in der Entstehung der bundesdeutschen Wirtschaftsordnung," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 6(2), pages 151-170, May.
    2. Spree, Reinhard, 2002. "Business Cycles in History," Discussion Papers in Economics 6, University of Munich, Department of Economics.
    3. Ritschl, Albrecht, 2002. "Deficit Spending in the Nazi Recovery, 1933-1938: A Critical Reassessment," Journal of the Japanese and International Economies, Elsevier, vol. 16(4), pages 559-582, December.
    4. Rainer Fremdling & Reiner Staeglin, 2014. "Editor's choice Output, national income, and expenditure: an input–output table of Germany in 1936," European Review of Economic History, Oxford University Press, vol. 18(4), pages 371-397.
    5. Thomas Ferguson & Robert Johnson, 2013. "When wolves cry ‘wolf’: systemic financial crises and the myth of the Danaid Jar," Chapters, in: Louis-Philippe Rochon & Mario Seccareccia (ed.), Monetary Economies of Production, chapter 7, pages 73-98, Edward Elgar Publishing.
    6. Cha, Myung Soo, 2000. "Did Korekiyo Takahashi Rescue Japan from the Great Depression?," Discussion Paper Series a395, Institute of Economic Research, Hitotsubashi University.
    7. Nikolaus Wolf, 2012. "Crises and Policy Responses within the Political Trilemma: Europe, 1929-1936 and 2008-2011," Working Papers 0016, European Historical Economics Society (EHES).
    8. José Alves, 2018. "Tax incidence and fiscal systems: some problems on tax compared history in XIX and XX centuries," Working Papers REM 2018/45, ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa.

    More about this item

    Keywords

    Nazi-Germany; Leontief-Keynes-Model; Multiplier; Employment Policy 1930s; Deficit Spending 1930s;
    All these keywords.

    JEL classification:

    • E16 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Social Accounting Matrix
    • N44 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Europe: 1913-
    • N14 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: 1913-
    • H5 - Public Economics - - National Government Expenditures and Related Policies

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:diw:diwwpp:dp1473. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Bibliothek (email available below). General contact details of provider: https://edirc.repec.org/data/diwbede.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.