Declining Output Volatility in Germany: Impulses, Propagation, and the Role of Monetary Policy

Ulrich Fritsche and Vladimir Kuzin

No 433, Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research

Abstract: This paper investigates the effect of economic integration on the ability of firms to maintain a collusive understanding about staying out of each other's markets. The paper distinguishes among different types of trade costs: ad valorem, unit, fixed. It is shown that for a sufficient reduction of ad valorem trade costs, a cartel supported by collusion on either quantities or prices will be weakened, thus integration is pro-competitive. If integration consists of a reductions in unit (fixed) trade costs a price setting cartel is strengthened (unaffected), while a quantity setting one is weakened.

Keywords: Output; Volatility; Monetary policy; Markov switching model; State space model; Spectral analysis; DSGE model (search for similar items in EconPapers)
JEL-codes: F12 F15 L12 L13 (search for similar items in EconPapers)
Pages: 27 p.
Date: 2004
New Economics Papers: this item is included in nep-dge
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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https://www.diw.de/documents/publikationen/73/diw_01.c.41972.de/dp433.pdf (application/pdf)

Related works:
Journal Article: Declining output volatility in Germany: impulses, propagation, and the role of monetary policy (2005)
Working Paper: Declining Output Volatility in Germany: Impulses, Propagation, and the Role of the Monetary Policy (2005)
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