A PROJECT REPORT ON

TRENDS IN ECONOMIC DEVELOPMENT OF A DEVELOPED NATIONSUBMITTEDTO THE UNIVERSITY OF MUMBAIAS A PARTIAL REQUIREMENT FOR COMPLETING THE DEGREE OFM.COM (ACCOUNTS) SEMESTER ISUBJECT: ECONOMICSSUBMITTED BY: JOHNSON ALBERT ISAACROLL NO: 52

UNDER THE GUIDANCE OFProf. Shreya Nagda

SIES COLLEGE OF COMMERCE AND ECONOMICS,PLOT NO. 71/72, SION MATUNGA ESTATET.V. CHIDAMBARAM MARG,SION (EAST), MUMBAI 400022.

CERTIFICATEThis is to certify that Johnson Albert Isaac of M.Com (Accounts) Semester I (academic year 2015-2016) has successfully completed the project on______________________________________________________under theGuidance of Prof. Shreya Nagda

_________________ ___________________ Prof. Shreya NagdaPayal Samwani

___________________ ___________________ (External Examiner) Dr. Kinnarry Thakkar

Place: _____________Date: ___________

DECLARATION

I, Johnson Albert Isaac Student M.Com (Accounts) Semester I (academic year 2015-16) hereby declare that, I have completed the project on ______________________________________________________________.The information presented in this project is true and original to the best of my knowledge.

Johnson Albert Isaac(Student Name & Sign)Roll No.:52

Place: _____________Date: _____________

ACKNOWLEDGEMENT

I would like to thank the University of Mumbai, for introducing M.Com (Accounts) course, thereby giving its students a platform to be abreast with changing business scenario, with the help of theory as a base and practical as a solution.I am indebted to the reviewer of the project Dr. Kinnarry Thakkar,, my project guide who is also our Principal for her support and guidance. I would sincerely like to thank her for all her efforts.Last but not the least; I would like to thank my parents for giving the best education and for their support and contribution without which this project would not have been possible.

______________________Johnson Albert Isaac(Student Name and sign)ROLL NO.52

Index1. Overview2. History3. Changing Trends In Economic Development Of Germany4. Conclusion

BibliographyTRENDS IN ECONOMIC DEVELOPMENT OF A DEVELOPED NATION

What do you mean by economic development??Economic developmentgenerally refers to the sustained, concerted actions ofpolicy makersandcommunitiesthat promote theliving andeconomic healthof a specific area. Economic development can also be referred to as the quantitative and qualitative changes in the economy. Such actions can involve multiple areas including development ofhuman capital,critical infrastructure, regionalcompetitiveness,environmental sustainability,social inclusion,health,safety,literacy, and other initiatives. Economic development differs fromeconomic growth. Whereas economic development is apolicy interventionendeavour with aims of economic and social well-being of people, economic growth is a phenomenon ofmarket productivityand rise inGDP. Consequently, as economistAmartya Senpoints out: economic growth is one aspect of the process of economic development.The scope of economic development includes the process and policies by which a nation improves the economic, political, and social well-being of its people.TheUniversity of Iowa's Centre for International Finance and Developmentstates that:'Economic development' is a term that economists, politicians, and others have used frequently in the 20th century. The concept, however, has been in existence in the West for centuries.Modernization, Westernisation, and especially Industrialisation are other terms people have used while discussing economic development. Economic development has a direct relationship with the environment.Although no one is sure when the concept originated, most people agree that development is closely bound up with the evolution of capitalism and the demise offeudalism International Economic Development council:-With more than 20,000 professional economic developers employed worldwide in this highly specialized industry, theInternational Economic Development Council(IEDC) headquartered in Washington, D.C. is a non-profit organization dedicated to helping economic developers do their job more effectively and raising the profile of the profession. With over 4,500 members across the US and internationally, serving exclusively the economic development community, IEDC membership represents the entire range of the profession ranging from regional, state, local, rural, urban, and international economic development organizations, as well as chambers of commerce, technology development agencies, utility companies, educational institutions, consultants and redevelopment authorities. Many individual states also have associations comprising economic development professionals, who work closely with IEDC. Community CompetitionOne unintended consequence of economic development is the intense competition between communities, states, and nations for new economic development projects in today'sglobalize world. With the struggle to attract and retain business, competition is further intensified by the use of many variations of economic incentives to the potential business such as: tax incentives, investment capital, donated land, utility rate discounts, and many others. IEDC places significant attention on the various activities undertaken by economic development organizations to help them compete and sustain vibrant communities.Additionally, the use of community profiling tools anddatabasetemplates to measure community assets versus other communities is also an important aspect of economic development. Job creation, economic output, and increase in taxable basis are the most common measurement tools. When considering measurement, too much emphasis has been placed on economic developers for "not creating jobs." However, the reality is that economic developers do not typically create jobs, but facilitate the process for existing businesses andstart-upsto do so. Therefore, the economic developer must make sure that there are sufficient economic development programs in place to assist the businesses achieve their goals. Those types of programs are usually policy-created and can be local, regional, state-wide and national in nature. What do you mean by trends in economic development/economic growth?Economic growth also known as trends in economic developmentis the increase in the amount of the goods and services produced by aneconomyover time. It is conventionally measured as the percent rate of increase inrealgross domestic product, orreal GDP. Growth is usually calculated inrealterms i.e.,inflation-adjustedterms to eliminate the distorting effect ofinflationon the price of goods produced. Ineconomics, "economic growth" or "economic growth theory" typically refers to growth ofpotential output, i.e., production at "full employment".As an area of study,economic growthis generally distinguished fromdevelopment economics. The former is primarily the study of how countries can advance their economies. The latter is the study of the economic aspects of the development process in low-income countries. See alsoeconomic development.Since economic growth is measured as the annual percent change of gross domestic product (GDP), it has all the advantages and drawbacks of that measure. Measuring economic growths/trends:-Economic growth is measured as a percentage change in theGross Domestic Product(GDP) orGross National Product(GNP). These two measures, which are calculated slightly differently, total the amounts paid for the goods and services that a country produced. As an example of measuring economic growth, a country that creates $9,000,000,000 in goods and services in 2010 and then creates $9,090,000,000 in 2011, has a nominal economic growth rate of 1% for 2011.To compare per capita economic growth among countries, the total sales of the respected countries may be quoted in a single currency. This requires converting the value of currencies of various countries into a selected currency, for example U.S. dollars. One way to do this conversion is to rely onexchange ratesamong currencies, for example how manyMexican pesosbuy a single U.S. dollar? Another approach is to use thepurchasing power paritymethod. This method is based on how much consumers must pay for the same "basket of goods" in each country.

Inflationordeflationcan make it difficult to measure economic growth. If GDP, for example, goes up in a country by 1% in a year, was this due solely to rising prices (inflation), or because more goods and services were produced and saved? To express real growth rather than changes in prices for the same goods, statistics on economic growth are often adjusted for inflation or deflation.For example, a table may show changes in GDP in the period from 1990 to 2000, as expressed in 1990 U.S. dollars. This means that the single currency being used is the U.S. dollar with the purchasing power it had in the U.S. in 1990. The table might mention that the figures are "inflation-adjusted" orreal. If no adjustment were made for inflation, the table might make no mention of inflation-adjustment or might mention that the prices arenominal.This can further be explained with the help of bar diagram as shown below.

Percentage changes in GDP growth spell length as each factor moves from 50th to 60th percentile and all other factors are held constant. Income distribution is measured by the Gini coefficient. Political institutions are measured by the Polity IV Project scale. Exchange rate competitiveness is measured by rate deviation from purchasing power parity adjusted for per capita income. What are developed nations??Adeveloped nationor "more developed country" (MDC), is a sovereign state that has a highly developed economy and advanced technological infrastructure relative to other less developed nations. Most commonly, the criteria for evaluating the degree of economic development aregross domestic product(GDP), theper capita income, level of industrialization, amount of widespread infrastructure and general standard of living. Developed countries havepost-industrialeconomies, meaning theservice sectorprovides more wealth than theindustrial sector. They are contrasted withdeveloping countries, which are in the process ofindustrialization, or undeveloped countries, which are pre-industrial and almost entirely agrarian. According to theInternational Monetary Fund, advanced economies comprise 65.8% of global nominal GDP and 52.1% of global GDP (PPP) in 2010.In 2011, the nine largest advanced economies by either nominal GDP or GDP (PPP) are theUnited States, theUnited Kingdom,Germany, France,Japan,Italy,Canada,SpainandSouth KoreaEconomic criteria have tended to dominate discussions. One such criterion is income per capita; countries with highgross domestic product(GDP) per capita would thus be described as developed countries. Another economic criterion isindustrialization; countries in which thetertiaryandquaternary sectors of industrydominate would thus be described as developed. More recently another measure, theHuman Development Index(HDI), which combines an economic measure, national income, with other measures, indices for life expectancy and education has become prominent. This criterion would define developed countries as those with a very high (HDI) rating. However, many anomalies exist when determining "developed" status by whichever measure is used.Economic criteria have tended to dominate discussions. One such criterion is income per capita; countries with highgross domestic product(GDP) per capita would thus be described as developed countries. Another economic criterion isindustrialization; countries in which thetertiaryandquaternary sectors of industrydominate would thus be described as developed. More recently another measure, theHuman Development Index(HDI), which combines an economic measure, national income, with other measures, indices for life expectancy and education has become prominent. This criterion would define developed countries as those with a very high (HDI) rating. However, many anomalies exist when determining "developed" status by whichever measure is used. What are developing nations??

Adeveloping nation, also called aless-developed country(LDC), is a nation with a low living standard, underdeveloped industrial base, and lowHuman Development Index(HDI) relative to other countriesThere is no universal, agreed-upon criterion for what makes a country developing versus developed and which countries fit these two categories, although there are general reference points such as the size of a nation's GDP compared to other nations.Countries with more advanced economies than other developing nations but that have not yet demonstrated signs of adeveloped country, are often categorized under the termnewly industrialized countries. Developing countries are, according to certain authors asWalt Whitman Rostow, countries in transition from various traditional lifestyles towards the modern lifestyle begun by theIndustrial Revolutionin the eighteenth and nineteenth centurie

Adeveloping country, also called aless-developed country(LDC)is a nation with a low living standard, underdeveloped industrial base, and lowHuman Development Index(HDI) relative to other countries.[2][3]There is no universal, agreed-upon criterion for what makes a country developing versus developed and which countries fit these two categories, although there are general reference points such as the size of a nation's GDP compared to other nations.Countries with more advanced economies than other developing nations but that have not yet demonstrated signs of adeveloped country, are often categorized under the termnewly industrialized countries. Developing countries are, according to certain authors asWalt Whitman Rostow, countries in transition from various traditional lifestyles towards the modern lifestyle begun by theIndustrial Revolutionin the eighteenth and nineteenth centuries HISTORY:-Theethno genesisof theGermanic tribesis assumed to have occurred during theNordic Bronze Age, or at the latest during the Pre-Roman Iron Age. From southern Scandinavia and northern Germany, the tribes began expanding south, east and west in the 1st centuryBC, coming into contact with theCeltictribes ofGaul, as well as Iranian,Baltic, andSlavictribes inCentral Europe.Little is known about early Germanic history, except through their recorded interactions with theRoman Empire, etymological research and archaeological finds.In the first years of the 1st century, Roman legions conducted a long campaign in Germania, the area north of the UpperDanubeand east of theRhine, in an attempt to expand the Empire's frontiers and shorten its frontier line. They subdued several Germanic tribes, such as theCherusci. The tribes became familiar with Roman tactics of warfare while maintaining their tribal identity. In 9 AD, aCheruscichieftain namedArminiusdefeated a Roman army in theBattle of the Teutoburg Forest, a victory credited with stopping the Roman advance into Germanic territories[2]and forming the birth of German history. Modern Germany, east of theRhine, remained outside the Roman Empire. By AD100, the time ofTacitus'sGermania, Germanic tribes settled along the Roman frontier at the Rhine and the Danube (theLimes Germanicus), occupying most of the area of modern Germany; however, Austria, southernBavaria, and the westernRhinelandwere Roman provinces.The 3rd century saw the emergence of a number of large West Germanic tribes:Alamanni,Franks,Bavarii,Chatti,Saxons,Frisii,Sicambri, andThuringii. Around 260, the Germanic peoples broke through theLimesand the Danube frontier into Roman-controlled lands.Seven large German-speaking tribes theVisigoths,Ostrogoths,Vandals,Burgundians,Lombards,SaxonsandFranks moved west and took part in theDecline of the Roman Empireand transformation of the oldWestern Roman Empire.The unoccupied part of present Germany was invaded by theHunsat the end of the 4th century and led to the beginning of the Migration Period. Hunnic hegemony of Germany lasted until 469. The Stem Duchies and MarchesStem Duchies(tribal duchies) in Germany were mainly the areas of the old German tribes of the region, especially in theeast.In the 5th century, theVlkerwanderung(or Germanic migrations) brought a number ofBarbariantribes into the failingRoman Empire. Tribes that became stem duchies were originally theAlamanni, theThuringii, theSaxons, theFranks, theBurgundies, and theRugii.[6]In contrast to laterduchies, these entities were not defined by strict administrative boundaries but by the area of settlement of major Germanictribes. Over the next few centuries, some tribes warred, migrated, and merged. All these tribes in Germania were eventually subjugated by theFranks. However, remnants of several stem duchies survive today as states or regions in modernWestern Europecountries: Germanstatessuch asBavariaandSaxony, German regions likeSwabia, and Frenchregions such as ofBurgundy, and Lorraine.Germansin the east also founded a series of border counties orMarches. To the north, these includedLusatia, theNorth Marchthat would becomeBrandenburgand the heart ofPrussia, and theBillung March. In the south, the marches includedCarniola,Styria, and theMarch of Austriathat would becomeAustria GEOGRAPHICAL LOCATION:-Germany is a country situated in central Europe. The country consists of16 statesand its capital andlargest cityisBerlin. Germany covers an area of 357,021 square kilometres (137,847sqmi) and has a largely temperate seasonal climate.Its neighbouring countries are Demark, Sweden, France, Switzerland, Austria, Czech republic & Poland. With 80.3million inhabitants, it is the most populous member state in theEuropean Union. Its chief language is German. Religions followed there are Roman Catholic, Muslim, protestant and others.Germany is the major economic and political power of the European continent and a historic leader in many theoretical and technical fields. POLITICAL AND ECONOMICAL ASPECT:-Germany is the world'sfourth-largest economy by nominal GDPand thefifth-largest by purchasing power parity. As a global leader in several industrial and technological sectors, it is thesecond-largest exporterandthird-largest importerof goods. The country ranks highly in manyinternational metrics of performance, has developed avery high standard of living, and features a comprehensivesocial securitysystem, which includes the world's oldestuniversal health caresystem. Known for its rich culturalandpoliticalhistory, Germany has been the home of many influentialphilosophers,music composers,scientists, and inventors. Germany has asocial market economywith a highly skilledlabour force, a largecapital stock, a low level of corruption,and a high level of innovation.It has the largest and most powerful national economy in Europe, thefourth largest by nominal GDPin the world,thefifth largest by PPP,and was the biggest net contributor to the EU budget in 2011. Thesector contributes approximately 71% of the total GDP, industry 28%, and agriculture 1%.The official average national unemployment rate in June 2013 was 6.6%.However, the official average national unemployment rate also includes people with a part-time job that are looking for a full-time job.The unofficial average national unemployment rate in 2011 was 5.7%.Germany is an advocate of closer European economic and political integration. Its commercial policies are increasingly determined by agreements among European Union (EU) members and by EU legislation. Germany introduced the common European currency, the euro, on 1 January 2002. Its monetary policy is set by theEuropean Central Bank, which is headquartered in Frankfurt. Two decades afterGerman reunification,standards of livingand per capita incomes remain significantly higher in the states of the former West Germany than in the former East. The modernisation and integration of the eastern German economy is a long-term process scheduled to last until the year 2019, with annual transfers from west to east amounting to roughly $80billion.In January 2009 the German government approved a 50billion economic stimulus plan to protect several sectors from a downturn and a subsequent rise in unemployment rates. Politically, Germany has a federal republic. Its defence budget rounds up to about $45 billion.

CHANGING TRENDS IN ECONOMIC DEVELOPMENT OF GERMANY:-

Ancient history:-

Germany before 1800 was heavily rural, with some urban trade centers. In the 19th century it began a stage of rapid economic growth and modernization, led by heavy industry. By 1900 it had the largest economy in Europe, a factor that played a major role in its entry intoWorld War IandWorld War II. Devastated by World War II, West Germany became an "economic miracle" in the 1950s and 1960s with the help of theMarshall Plan. Currently it is the largest individual economy in the EU with GDP of roughly 3 trillion USDEconomic prosperity did not mean geographical expansion; it required collaboration with some, competition with others, and an intimate understanding among government, commerce, and production. A desire to save was also born in the German experience of political, military, and economic uncertainty

The thirty years war:-

The Thirty Years' War (16181648) was ruinous to the twenty million civilians and set back the economy for generations, as marauding armies burned and destroyed what they could not seize. The fighting often was out of control, with marauding bands of hundreds or thousands of starving soldiers spreading plague, plunder, and murder. The armies that were under control moved back and forth across the countryside year after year, levying heavy taxes on cities, and seizing the animals and food stocks of the peasants without payment. The enormous social disruption over three decades caused a dramatic decline in population because of killings, disease, crop failures, declining birth rates and random destruction, and the out-migration of terrified people. One estimate shows a 38% drop from 16 million people in 1618 to 10 million by 1650, while another shows "only" a 20% drop from 20 million to 16 million. TheAltmarkandWrttembergregions were especially hard hit. It took generations for Germany to fully recover.The emancipation of the serfs came in 1770-1830, beginning with then Danish Schleswig in 1780. Prussia abolished serfdom with theOctober Edictof 1807, which upgraded the personal legal status of the peasantry and gave them the chance to purchase for cash part of the lands they were working. They could also sell the land they already owned. The edict applied to all peasants whose holdings were above a certain size, and included both Crown lands and noble estates. The peasants were freed from the obligation of personal services to the lord and annual dues. A bank was set up so that landowner could borrow government money to buy land from peasants (the peasants were not allowed to use it to borrow money to buy land until 1850). The result was that the large landowners obtained larger estates, and many peasant became landless tenants, or moved to the cities or to America. The other German states imitated Prussia after 1815.

In sharp contrast to the violence that characterized land reform in the French Revolution, Germany handled it peacefully. In Schleswig the peasants, who had been influenced by the Enlightenment, played an active role; elsewhere they were largely passive. Indeed, for most peasants, customs and traditions continued largely unchanged, including the old habits of deference to the nobles whose legal authority remains quite strong over the villagers.Although the peasants were no longer tied to the same land like serfs had been, the old paternalistic relationship in East Prussia lasted into the 20th centuryThis was followed by the great Industrial revolution from 1850-1990.

Industrial revolution and changing trend from 1850-1990:-

Before 1850 Germany lagged far behind the leaders in industrial development, Britain, France and Belgium. By mid-century, however, the German states were catching up, and by 1900 Germany was a world leader in industrialization, along with Britain and the United States. In 1800, Germany's social structure was poorly suited to entrepreneurship or economic development. Domination by France during the era of the French Revolution (1790s to 1815), produced important institutional reforms, including the abolition of feudal restrictions on the sale of large landed estates, the reduction of the power of the guilds in the cities, and the introduction of a new, more efficient commercial law. Nevertheless, traditionalism remained strong in most of Germany. Until mid-century, the guilds, the landed aristocracy, the churches, and the government bureaucracies had so many rules and restrictions that entrepreneurship was held in low esteem, and given little opportunity to develop. From the 1830s and 1840s, Prussia, Saxony, and other states reorganized agriculture, introducing sugar beets, turnips, and potatoes, yielding a higher level of food production that enabled a surplus rural population to move to industrial areas. The beginnings of the industrial revolution in Germany came in the textile industry, and was facilitated by eliminating tariff barriers through theZollverein, starting in 1834. The take-off stage of economic development came with the railroad revolution in the 1840s, which opened up new markets for local products, created a pool of middle manager, increased the demand for engineers, architects and skilled machinists and stimulated investments in coal and iron. The political decisions about the economy of Prussia (and after 1871 all Germany) were largely controlled by a coalition of "rye and iron", that is the Junker landowners of the east and the heavy industry of the west. The main areas in which Germany brought industrial changes are explained ahead.

The supporting regions were as under:- Regions:-The north German states were for the most part richer in natural resources than the southern states. They had vast agricultural tracts fromSchleswig-Holsteinin the west through Prussia in the east. They also had coal and iron in theRuhr Valley. Through the practice ofprimogeniture, widely followed in northern Germany, large estates and fortunes grew. So did close relations between their owners and local as well as national governments.The south German states were relatively poor in natural resources and those Germans therefore engaged more often in small economic enterprises. They also had no primogeniture rule but subdivided the land among several offspring, leading those offspring to remain in their native towns but not fully able to support themselves from their small parcels of land. The south German states, therefore, fosteredcottage industries, crafts, and a more independent and self-reliant spirit less closely linked to the government.

And the various industrial approaches are as under:- Coal:-The first important mines appeared in the 1750s, in the valleys of the rivers Ruhr, Inde and Wurm where coal seams outcropped and horizontal adit mining was possible. In 1782 theKruppfamily began operations nearEssen. After 1815 entrepreneurs in the Ruhr Area, which then became part ofPrussiatook advantage of the tariff zone (Zollverein) to open new mines and associatediron meters. New railroads were built by British engineers around 1850. Numerous small industrial centres sprang up, focused on ironworks, using local coal. The iron andsteelworks typically bought mines, and erectedcookingovens to supply their own requirements incokeand gas. These integrated coal-iron firms ("Huettenzechen") became numerous after 1854; after 1900 they became mixed firms called "Konzern."The average output of a mine in 1850 was about 8,500 short tons; its employment about 64. By 1900, the average mine's output had risen to 280,000 and the employment to about 1,400.TotalRuhrcoal output rose from 2.0 million short tons in 1850 to 22 in 1880, 60 in 1900, and 114 in 1913, on the verge of war. In 1932 output was down to 73 million short tons, growing to 130 in 1940. Output peaked in 1957 (at 123 million), declining to 78 million short tons in 1974. End of 2010 five coal mines were producing in Germany.The miners in the Ruhr region were divided by ethnicity (with Germans and Poles) and religion (Protestants and Catholics). Mobility in and out of the mining camps to nearby industrial areas was high. The miners split into several unions, with an affiliation to a political party. As a result the socialist union (affiliated with the Social Democratic Party) competed with Catholic and Communist unions until 1933, when the Nazis took over all of them. After 1945 the socialists came to the fore.

Above are the regions covered by the ancient coal mines areas of Germany.

Banks and Cartels:-German banks played central roles in financing German industry. Different banks formed cartels in different industries. Cartel contracts were accepted as legal and binding by German courts although they were held to be illegal in Britain and the United States.The process of cartelization began slowly, but the cartel movement took hold after 1873 in the economic depression that followed the post-unification speculative bubble. It began in heavy industry and spread throughout other industries. By 1900 there were 275 cartels in operation; by 1908, over 500. By some estimates, different cartel arrangements may have numbered in the thousands at different times, but many German companies stayed outside the cartels because they did not welcome the restrictions that membership imposed.The government played a powerful role in the industrialization of theGerman Empirefounded byOtto von Bismarckin 1871 during a period known as theSecond Industrial Revolution. It supported not only heavy industry but also crafts and trades because it wanted to maintain prosperity in all parts of the empire. Even where the national government did not act, the highly autonomous regional and local governments supported their own industries. Each state tried to be as self-sufficient as possible.Despite the several ups and downs of prosperity and depression that marked the first decades of the German Empire, the ultimate wealth of the empire proved immense. German aristocrats, landowners, bankers, and producers created what might be termed the first German economic miracle, the turn-of-the-century surge in German industry and commerce during which bankers, industrialists, mercantilists, the military, and the monarchy joined forces.

Class and Welfare state:-Germany's middle class, based in the cities, grew exponentially, but it never gained the political power it had in France, Britain or the United States. The Association of German Women's Organizations (BDF) was established in 1894 to encompass the proliferating women's organizations that had sprung up since the 1860s. From the beginning the BDF was a bourgeois organization, its members working toward equality with men in such areas as education, financial opportunities, and political life. Working-class women were not welcome; they were organized by the Socialists.Bismarck built on a tradition of welfare programs in Prussia and Saxony that began as early as in the 1840s. In the 1880s he introduced old age pensions, accident insurance, medical care and unemployment insurance that formed the basis of the modernEuropean welfare state. His paternalistic programs won the support of German industry because its goals were to win the support of the working classes for the Empire and reduce the outflow of immigrants to America, where wages were higher, but welfare did not exist. Bismarck further won the support of both industry and skilled workers by his high tariff policies, which protected profits and wages from American competition, although they alienated the liberal intellectuals who wanted free trade.

Railways:-Political disunity of three dozen states and a pervasive conservatism made it difficult to build railways in the 1830s. However, by the 1840s, trunk lines did link the major cities; each German state was responsible for the lines within its own borders. EconomistFriedrich Listsummed up the advantages to be derived from the development of the railway system in 1841: As a means of national defence, it facilitates the concentration, distribution and direction of the army. It is a means to the improvement of the culture of the nation. It brings talent, knowledge and skill of every kind readily to market. It secures the community against dearth and famine, and against excessive fluctuation in the prices of the necessaries of life. It promotes the spirit of the nation, as it has a tendency to destroy the Philistine spirit arising from isolation and provincial prejudice and vanity. It binds nations by ligaments, and promotes an interchange of food and of commodities, thus making it feel to be a unit. The iron rails become a nerve system, which, on the one hand, strengthens public opinion, and, on the other hand, strengthens the power of the state for police and governmental purposes. Lacking a technological base at first, the Germans imported their engineering and hardware from Britain, but quickly learned the skills needed to operate and expand the railways. In many cities, the new railway shops were the centres of technological awareness and training, so that by 1850, Germany was self-sufficient in meeting the demands of railroad construction, and the railways were a major impetus for the growth of the new steel industry. Observers found that even as late as 1890, their engineering was inferior to Britains. However, German unification in 1870 stimulated consolidation, nationalisation into state-owned companies, and further rapid growth. Unlike the situation in France, the goal was support of industrialisation, and so heavy lines crisscrossed the Ruhr and other industrial districts, and provided good connections to the major ports of Hamburg and Bremen. By 1880, Germany had 9,400 locomotives pulling 43,000 passengers and 30,000 tons of freight, and pulled ahead of France

Agriculture:-Perkins (1981) argues that more important than Bismarck's new tariff on imported grain was the introduction of the sugar beet as a main crop. Farmers quickly abandoned traditional, inefficient practices for modern new methods, including use of new fertilizers and new tools. The knowledge and tools gained from the intensive farming of sugar and other root crops made Germany the most efficient agricultural producer in Europe by 1914. Even so farms were small in size, and women did much of the field work. An unintended consequence was the increased dependence on migratory, especially foreign labour

Chemicals:-The economy continued to industrialize and urbanize, with heavy industry (coal and steel especially) becoming important in the Ruhr, and manufacturing growing in the cities, the Ruhr, and Silesia. Based on its leadership in chemical research in the universities and industrial laboratories, Germany became dominant in the world's chemical industry in the late 19th century. Big businesses such asBASFandBayerled the way in their production and distribution of artificial dyes and pharmaceuticals during the Wilhelmine era, leading to the German monopolisation of the global chemicals market at 90 percent of the entire share of international volumes of trade in chemical products by 1914. Steel:-Germany became Europe's leading steel-producing nations in the late 19th century, thanks in large part to the protection from American and British competition afforded by tariffs and cartels.The leading firm was "Friedrich Krupp AG Hoesch-Krupp" run by theKrupp family. The "German Steel Federation" was established in 1874.

CONCLUSION:-The above project gives us an insight on the country, its positives and negatives.Germany is a country that has risen from ashes. With every fall down, the countrys economy has always pushed back with grater impact.It is one of the leading developed countries in todays time.It is known worldwide for the famous brands that it has; for example the Volkswagen.

Today Germany holds:- Revenue: $1.398 trillion Expenditure: $1.54 trillion. Its principle places of exports are: France, US, Netherlands, UK, Italy, China, Russia, Austria. GDP (per captai): $34,200 GDP ((growth rate): -5%.

BIBLIOGRAPHY:-1) The penguin CNBC-TV 18 business.Author: Derek o Brien2) Internet :www money control.com/www.wikipedia.com3) The economic times-magazine

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