My question is: comparing the words for the verb "hear" in Gothic(hausjan) and Old English(hieran), I became curious as to how did the diphthong 'au' came to be 'ie' in OE. I tried explaining it through the process of breaking or i-mutation but I don't think it's correct. Any help and clarity over this matter are greatly appreciated.
The Germanic diphthong /au/ became /æa/ (spelled "ea") in stressed syllables. This dipthong was further subject to i-mutation. In the West Saxon dialects, i-mutation of "ea" was <ie> and then later /i/ or /y/ depending on the dialect. The pronunciation of "ie" is disputed. The best proposal I've seen is /iy/, which could easily simplify to /i/ or /y/. The non-West Saxon dialects umlauted "ea" to "e" (/e/). This is the source of the Modern English pronunciation, after the Great Vowel Shift.
- Proto-Germanic /hauzijaną/
- West Germanic /haurian/ (change of Verner's Law consonant, loss of final non-high vowels)
- Pre-OE /hæurian/ (Anglo-Frisian brightening)
- Early OE /heyrian/ (i-mutation;l, intermediate stage of diphthong is conjecture)
- Early WS /hiyran/ (equal height diphthongs, syncopation of medial vowel)
- Later WS /hyran/ or /hiran/ (simplification of diphthong)
- Non-WS /høran/ > /heran/ (different resolution of the diphthong and then unrounding)
This is a simplification of the timeline you'll find in Campbell and Ringe, among others. I made some editorial decisions based on my own interpretations.