DER BEITRAG DER GELDPOLITIK ZUR KONJUNKTURELLEN ENTWICKLUNG IN DER BUNDESREPUBLIK DEUTSCHLAND 1973‐1980*

Manfred J. and M. Neumann

Kyklos, 1981, vol. 34, issue 3, 405-431

Abstract: This paper examines the contribution of monetary policy to the development of inflation and real growth in the Federal Republic of Germany since 1973. The investigation is based on a macro‐model for the shorter run, taking into account rational expectations of permanent impulses. Reduced form estimates for the period 1973‐1980, based on semi‐annual data, permit to explain about 80 percent of the variances of the inflation rate and of output growth. The estimates are used to demonstrate (i) that the severe recession of 1974/75 was initiated by unanticipated contractionary impulses from monetary policy and from relative import prices, (ii) that monetary policy did not reduce the variance of output growth, resulting from unanticipated impulses of relative import prices and real export demand, (iii) that monetary policy supported inflation by providing too large permanent impulses.

Date: 1981
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