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Germany's experience of the Great Depression was exceptionally severe. Between the summer of 1929 and early 1932, German unemployment rose from just under 1.3 million to over 6 million, corresponding to a rise in the unemployment rate from 4.5 percent of the labor force to 24 percent. Following a seasonal upswing in labor demand, reducing the level to 5.1 million in September 1932, unemployment again exceeded 6 million at the start of 1933. Over the same period real GDP, according to the latest estimates, declined at an annual rate of 8.3 percent. Real weekly wages, having continued to rise up to early 1931, started a decline of 2.5 percent per annum that lasted until mid-1935. In short the German slump was the most dramatic among major European economies.
As the economic crisis unfolded, the first German Republic suffered the decline of its democratic institutions. As the country was ruled by a series of minority cabinets and presidential decrees, the share of the vote at successive elections shifted in favor of the Communist and Nazi opposition parties, rising from 13 percent under the last parliamentary coalition government in May 1928 to half of all valid votes cast in the last free elections of November 1932. On 30 January 1933 the Reichspräsident , after an earlier refusal in 1932, appointed Adolf Hitler as the chancellor of a Nazi dominated coalition, setting the nation upon a path of totalitarian rule, warfare, and racial persecution. Thus the dismal record of the German economy in the interwar period holds a pivotal position in the analysis of the political demise of the Weimar Republic. Ranking among the world's most dynamic economies in the years before World War I, Germany experienced successively inflation and severe deflation during the 1920s and the early 1930s. Both events undermined the already questionable legitimacy of what has been called the improvised Republic and created the conditions for the emergence of political radicalization.
Successive authors have differed in their assessment of the relevant mechanisms at work and on the extent to which the monetary and political events of the 1920s made Germany vulnerable to the impact of the Great Depression. Early studies of the Weimar decline did not emphasize the interaction of political and economic processes. A...