Inflation and Monetary Targeting in Germany

Juergen von Hagen

Working Papers from American Institute for Contemporary German Studies-

Abstract: We review Germany's experience with inflation targeting since the mid-1970s. Inflation targeting is the basis for monetary targeting, but the inflation target has priority over the monetary target. We develop a model of the equilibrium price level in Germany and show that, on several occasions, the Bundesbank behaved as if it pursued a price level rather that an inflation target. This may be due to the slow adjustment of the actual to the equilibrium price level.

Keywords: GERMANY; INFLATION; MONETARY POLICY (search for similar items in EconPapers)
JEL-codes: E31 E52 (search for similar items in EconPapers)
Pages: 24 pages
Date: 1995
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Citations: View citations in EconPapers (64)

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Persistent link: https://EconPapers.repec.org/RePEc:fth:amiger:03

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