An Empirical Analysis of the Changing Role of the German Bundesbank after 1983

40 Citations (Scopus)

Abstract

A cointegrated VAR model describing a small macroeconomic system consisting of money, income, prices, and interest rates is estimated on split sample data before and after 1983. The monetary mechanisms were found to be significantly different. Before 1983, the money supply seemed controlable and expansion or contraction of money supply had the expected effect on prices, income, and interest rates. After 1983, the conventional mechanisms no longer seemed to work. The empirical analysis pointed to the crucial role of the bond rate in the system, particularly for the more recent period
Original languageEnglish
PublisherDepartment of Economics, University of Copenhagen
Number of pages30
Publication statusPublished - 1996

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