Gerdesmeier, Dieter Reimers, Hans-Eggert Roffia, Barbara
Year of Publication:
Wismarer Diskussionspapiere No. 01/2015
Hochschule Wismar, Fakultät für Wirtschaftswissenschaften, Wismar
This paper models the relationship between consumer and asset prices (approximated by house prices, oil prices and the exchange rate) by means of a Markov Switching model (MS model). It can be shown that house prices appear to play a significant role in the determination of consumer prices in a high-inflation and a low-inflation regime, whereas oil prices and the exchange rate only unfold an impact in a high-inflation regime. Taken together, these results can be seen as being of help for the monetary policy decision-making process.