German Unification: What Have We Learned from Multi-Country Models?

Joseph E. Gagnon, Paul Masson and Warwick McKibbin

Chapter 4 in Macroeconomic Modelling and Monetary and Exchange Rate Regimes, 2019, pp 101-140 from World Scientific Publishing Co. Pte. Ltd.

Abstract: This study reviews early simulations of the effects of German unification using three different rational expectations multi-country models. Despite significant differences in their structures and in the implementations of the unification shock, the models delivered a number of common results that proved reasonably accurate guides to the direction and magnitude of the effects of unification on key macroeconomic variables. Unification was expected to give rise to an increase in German aggregate demand that would put upward pressure on output, inflation, and the exchange rate, and downward pressure on the current account balance. The model simulations also highlighted contractionary effects of high German interest rates on EMS countries.

Keywords: Exchange Rates; Modelling; Monetary Unions; Inflation Targeting (search for similar items in EconPapers)
JEL-codes: F45 (search for similar items in EconPapers)
Date: 2019
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.worldscientific.com/doi/pdf/10.1142/9789811201721_0004 (application/pdf)
https://www.worldscientific.com/doi/abs/10.1142/9789811201721_0004 (text/html)
Ebook Access is available upon purchase.

Related works:
Journal Article: German unification: What have we learned from multi-country models? (1996)
Working Paper: German unification: what have we learned from multi-country models? (1996)
Working Paper: German Unification: What Have We Learned From Multi-Country Models? (1996)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wsi:wschap:9789811201721_0004

Ordering information: This item can be ordered from

Access Statistics for this chapter

More chapters in World Scientific Book Chapters from World Scientific Publishing Co. Pte. Ltd.
Bibliographic data for series maintained by Tai Tone Lim ().