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Journal Article
Germany's recession continues, but long-term outlook is bright
AUTHORS: Chriszt, Michael J.
DATE: 1993-07

Journal Article
Bundesbank credit facilities defined
AUTHORS: Chriszt, Michael J.
DATE: 1992-07

Working Paper
Money demand and relative prices in hyperinflations: evidence from Germany and China
AUTHORS: Tallman, Ellis W.; Wang, Ping
DATE: 1992

Working Paper
Money demand and relative prices in the German hyperinflation
AUTHORS: Tallman, Ellis W.; Wang, Ping
DATE: 1991

Journal Article
The U.S. trade deficit: a perspective from selected bilateral trade models
AUTHORS: Bergstrand, Jeffrey H.
DATE: 1987-05

Working Paper
How independent should a central bank be?
The case for an independent central bank is becoming increasingly accepted. This new orthodoxy is based on three foundations: the success of the Bundesbank and the German economy over the past forty years; the theoretical academic literature on the inflationary bias of discretionary policy-making; and the empirical academic literature on central bank independence (CBI). The purpose of this paper is to examine each of the three legs of the argument for increased CBI. ; First we examine the empirical evidence on the relationship between CBI and economic performance. In this context, we compare the German experience with that in the US and conclude that there is indeed a tradeoff between price and output stability. We also examine the sacrifice ratios in recent disinflations and show that sacrifice ratios are positively correlated with CBI. ; Second we present a theoretical model which allows us to consider the optimal degree of inflation aversion of the central bank. We show that society will be better off if the central bank precommits to an inflation rate, provided the fiscal authority is reasonably well behaved. We tie these conclusions to the literature on optimal incentive contracts for central banks. ; Finally we make the distinction between goal independence and instrument independence for the central bank. Given that a tradeoff exists between output and inflation variability, the tradeoff should not be left to the central bank, that is it should not have goal independence. Rather the goals for the central bank should be clearly specified, so that the central bank then can be accountable for achieving these goals. However, it should be free in its choice of means to achieve these goals.
AUTHORS: Debelle, Guy; Fischer, Stanley
DATE: 1994

Working Paper
A comparison of discount rate models using international stock market data
This paper compares the ability of four discount rate models to explain the cross-sectional and time-series variation of stock returns in the U.S., Japan, England, Germany, and Canada. The data consist of quarterly returns (in dollars) on Morgan Stanley's Capital International indices for the period 1972 through 1991. The following four models are considered: (1) A consumption CAPM model, linking the discount rate to the intertemporal marginal rate of substitution in consumption, (2) A production CAPM model, linking the discount rate to the intertemporal marginal rate of transformation in production, (3) A traditional CAPM model, linking the discount rate to the stock returns themselves, and (4) A constant (identical) discount rate model, which rules out risk premia, and therefore provides a useful benchmark. ; The main result is that a production-based CAPM (Cochrane(1991)) performs at least as well as the more standard consumption-based CAPM in explaining variation in national equity markets. However, as with the CCAPM, there is something of an `Equity Premium Puzzle' associated with a simple frictionless PCAPM. In particular, very high depreciation rates or low elasticities of substitution between capital and labor are required to fit the data. The intuition is as follows - Viewed from either the consumption or production side, the challenge is to explain why small changes in quantity variables are associated with large changes in relative prices. In the CCAPM this requires very curved indifference curves (i.e., a large coefficient of relative risk aversion), whereas in the PCAPM this requires very curved isoquants (i.e., a low elasticity of substitution between capital and labor).
AUTHORS: Kasa, Kenneth
DATE: 1994

Working Paper
Optimal policy with limited commitment
This paper uses Whiteman's(1986) frequency-domain optimization methodology to parameterize the precommitment period in a standard rational expectations policy design model. This allows researchers to adopt an empirical approach to the time consistency issue. That is, the operative commitment horizon in a given policy setting can be estimated along with the other parameters characterizing the preferences and constraints of the agents in the model. It is shown that the commitment horizon can be estimated by running (restricted) regressions of the policymaker's instrument variable on past values of its target variable. ; Parameterizing the commitment horizon also delivers a mapping between welfare (or the value of the policymaker's objective function) and the length of the commitment horizon. The paper shows that the rate of convergence to the perfect precommitment value can be either quite slow or quite rapid, suggesting that the severity of the time consistency constraint can be sensitive to variation in the assumed commitment horizon. ; Finally, the results are applied to U.S. and German monetary policy during the post-Bretton Woods era. Assuming the monetary authority attempts to stabilize inflation using a Federal Funds like interest rate as an instrument, the results point to a one-month ahead commitment horizon for the U.S. Federal Reserve, and to a twelve-month ahead commitment horizon for the German Bundesbank. However, these horizons are estimated very imprecisely.
AUTHORS: Kasa, Kenneth
DATE: 1994

Journal Article
Commerce and banking: the German case
AUTHORS: Pozdena, Randall
DATE: 1987

Journal Article
German economic unification
AUTHORS: Cheng, Hang-Sheng
DATE: 1990



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Gagnon, Joseph E. 5 items

Schmid, Frank A. 5 items

Emmons, William R. 4 items

Fischer, Stanley 3 items

Frenkel, Jacob A. 3 items

Glick, Reuven 3 items

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