What Is an Economic Miracle?

An economic miracle is a term used for any type of resurgence in a national economy from a period of extreme distress. This type of resurgence is considered miraculous because of the depths to which the economy in question had sunk and the seemingly dwindling prospects for a recovery. Common examples of an economic miracle include Germany and Japan, who, 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 brought about by some sort of change in philosophy or innovative strategy enacted by the government or economic leaders.

There have been certain times in history where countries with seemingly hopeless economic prospects have not only pulled themselves up from the depths but have also found a way to thrive once again. On many of these occasions, the recoveries have occurred in time spans much quicker than economic experts could have predicted. Since these amazing turnarounds seem to have been almost divinely inspired, the phenomenon has become known as an economic miracle.

Certain characteristics are generally in place for a situation to be considered an economic miracle. The economy of the country described is usually one that fell from a former high point to perhaps the lowest point of its history. At the low point, macroeconomic signifiers like high unemployment, stagnant growth, and rising inflation often reigned. From that point, the economy began to reverse its trajectory until it reached its former heights and perhaps even exceeded them.

For an economic miracle to take place, some sort of action usually has to be taken by government leaders. In some past cases of these miracles, it took loosening of restrictions to get the economy flowing and to spur growth. Other economic miracles came about through the combined efforts of all sorts of entities, from national banks down to small businesses and consumers. Whatever initiatives were used, they generally were undertaken by individuals with the foresight to understand how those measures would reinvigorate the economy.

Throughout history, perhaps the best examples of an economic miracle came from a pair of countries who were devastated by being on the losing end of World War II. In the immediate aftermath of the war, both Germany and Japan seemed to have little chance of ever returning to the ranks of economic superpowers. Yet by the latter half of the twentieth century, their booming economies were the envy of most of the nations around the world.