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Title:Asymmetric monetary policy effects in Germany PDF Logo
Authors:Tober, Silke
Kuzin, Vladimir N.
Issue Date:2004
Series/Report no.:DIW-Diskussionspapiere 397
Abstract:In a small structural model we find asymmetries in the effects of monetary policy in Germany depending on whether the economy is in an upswing or a downswing. These two different regimes are also identified using a Markov-switching model and the Kalman filter. Our results indicate that the effects of monetary policy are significantly higher in a downswing than in an upswing. It follows not only that monetary policy has to raise interest rates markedly if an economy is overheating but also that once a downturn is discernible, interest rates have to be lowered rapidly so as to prevent an overly large reaction of the real economy.
Subjects:Asymmetry
monetary policy
Markov switching
structural model
JEL:E44
E5
E32
C32
C51
Document Type:Working Paper
Appears in Collections:DIW-Diskussionspapiere
Publikationen von Forscherinnen und Forschern des DIW

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