Demystifying the German WWII "Armament Miracle"

[Richard Fiero]

Snipped from NEP: New Economics Papers
Business, Economic and Financial History
======
Demystifying the German "Armament Miracle" During World War II. New
Insights from the Annual Audits of German Aircraft Producers
Date: 2005-01 
By:  Lutz Budrab (University of Bochum) 
Jonas Scherner (University of Mannheim) 
Jochen Streb (University of Hohenheim) 

URL: http://d.repec.org/n?u=RePEc:egc:wpaper:905&r=his 
Armament minister Albert Speer is usually credited with causing the
boom in German armament production after 1941. This paper uses the
annual audit reports of the Deutsche Revisions- und Treuhand AG for
seven firms which together represented about 50 % of the German
aircraft producers. We question the received view by showing that in
the German aircraft industry the crucial changes that triggered the
upswing in aircraft production already occurred before World War II.
The government decided in 1938 that aircraft producers had to
concentrate on a few different types, and in 1937 that cost-plus
contracts were replaced with fixed price contracts. What followed was
not a sudden production miracle but a continuous development which was
fuelled first by learning-by-doing and then by the ongoing growth of
the capital and labor endowment.
Keywords:  German armament miracle, World War II, Albert Speer,
Aircraft industry, Learning-by-doing, Fixed-price Contract, Labor
productivity
JEL: H57 L64 N44 
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