Recovery and reconstruction : Europe after the Second World War

1945 was a watershed in the economic history of Europe. It marked the end of the worst of all wars but also the beggining of a quarter century of undprecendented economic and social progress. This paradox is explained by three factors: strong supply-side foundations, at least in western Europe; the Marshall Plan; and the revival of the German economy as foundational pillar of the European division of labour. By contrast, in Eastern Europe, the foundations for recovery were undermined by the war-induced demographic disaster, which limited postwar growth.