Year: 1999
Author: Roeger, Werner
Journal of Contextual Economics – Schmollers Jahrbuch, Vol. 119 (1999), Iss. 1 : pp. 57–97
Abstract
The paper addresses the question whether an open economy dynamic equilibrium model with search in the labour market, price adjustment costs and wage staggering is consistent with important stylised facts concerning the relationship between prices, interest rates and output for the German economy over the flexible exchange rate period. It is found that by allowing for technology and tnonetary shocks, the model can replicate the negative contemporaneous correlation between prices and output, as well as the positive contemporaneous correlation between inflation and output. The results generated by the model economy are also consistent with characteristic lead and lag patterns, such as the lead of prices and nominal short term interest rates relative to output and the lagged response of inflation to movements of GDP.
Journal Article Details
Publisher Name: Global Science Press
Language: Multiple languages
DOI: https://doi.org/10.3790/schm.119.1.57
Journal of Contextual Economics – Schmollers Jahrbuch, Vol. 119 (1999), Iss. 1 : pp. 57–97
Published online: 1999-01
AMS Subject Headings: Duncker & Humblot
Copyright: COPYRIGHT: © Global Science Press
Pages: 41