What’s an econ miracle?

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An economic miracle is a term used for any type of resurgence in a national economy from a period of extreme suffering. This type of resurgence is considered miraculous due to the depths to which the economy in question had sunk and the seemingly diminishing prospects for a recovery. Common examples of an economic miracle are Germany and Japan, which, after being devastated by World War II, both managed to become economic superpowers again in a relatively short time. In most cases, this phenomenon is caused by some sort of change in the innovation philosophy or strategy implemented by the government or business leaders.

There have been certain periods in history where countries with seemingly hopeless economic prospects have not only pulled themselves up from the depths but also found ways to thrive once again. On many of these occasions, recoveries occurred much faster than economic experts could have predicted. Since these incredible reversals appear to have been almost divinely inspired, the phenomenon has come to be known as an economic miracle.

Certain characteristics are generally present for a situation to be considered an economic miracle. The economy of the country described is usually one that has fallen from a former high point to perhaps the low point in its history. At the low point, macroeconomic factors such as high unemployment, sluggish growth and rising inflation often reign. From that point, the economy began to reverse its trajectory until it reached its previous highs and perhaps even surpassed them.

For an economic miracle to occur, government leaders usually have to take some action. In some past cases of these miracles, restrictions have had to be eased to get the economy flowing and stimulate growth. Other economic miracles have occurred through the combined efforts of all kinds of entities, from national banks down to small businesses and consumers. Whatever initiatives were used, they were typically undertaken by individuals with the foresight to understand how those measures would invigorate the economy.

Throughout history, perhaps the best examples of economic miracles have come from a pair of countries that were devastated by being on the losing end of World War II. In the immediate postwar period, both Germany and Japan seemed to have little chance of returning to the ranks of economic superpowers. However, in the second half of the twentieth century, their booming economies were the envy of most nations of the world.

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