What effect did the Berlin Wall have on economy and politics?

Answer 1

Berlin's economy during the time of the Berlin Wall was split, just like the city. In the west the people prospered under the system of capitalism and self-sufficiency. In the east the government ran everything, and the people did poorly and had very little.

Answer 2

The Berlin Wall was built in 1961. It at once became another "hot spot" in the Cold War. It became the symbol of the rift between East -West relations. The wall separated the democratic West Berlin from the Communist controlled East Berlin which was a part of the German Democratic Republic.

The reason for the GDR (East Germany) for building the wall was because between 1949 to 1961, an estimated 2 million Germans escaped from the GDR to West Berlin.

On a political basis, the wall accentuated the rift between the USSR and the Western nations of NATO.

On the economic front, the wall pointed out to the world the failure of GDR economics and the comparative wealth of West Germany and West Berlin. Many escapees from East Berlin, did so not only for political freedom reasons but for better economic reasons. They believed they could improve the well being of their personal wealth and well being by leaving the GDR.

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Berlin had been a Cold War "hot spot" for the past three years if not since the breakdown of four-power control in 1948. Far from creating a source of tension, the Wall stabilised a dangerous situation - hence its survival for 28 years and (in part) the first stirrings of detente later in the 1960s. For the GDR the ending of the mass exodus (chiefly of the young and productive) eased an emerging manpower crisis and averted economic collapse. For the rival powers, the Wall "froze" a key bone of contention. The unpopular act of 1961 may have prevented a far worse outcome than that of 1989.