Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/215670
Authors: 
Hoffmann, Mathias
Kliem, Martin
Krause, Michael
Moyen, Stephane
Sauer, Radek
Year of Publication: 
2020
Series/Report no.: 
Bundesbank Discussion Paper 17/2020
Abstract: 
We assess to what extent wage inflation policies in Germany could contribute to an economic rebalancing in the euro area and the rest of the world. We find that a rise in nominal wage inflation has positive short-run effects on inflation and output in Germany and the rest of the euro area. The duration of constant interest rates and expectations about the monetary policy stance matter to the magnitude of the results obtained. We establish that the modelling of the trade relationships with the rest of the world is of particular importance, as it allows to capture the induced relative price movements and hence changes in competitiveness within the three regions. Our results are obtained from an estimated DSGE model which consists of Germany, the rest of the euro area, and the rest of the world.
Subjects: 
DSGE model
Bayesian estimation
Monetary policy
Trade balance
ISBN: 
978-3-95729-693-1
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.