The paper applies an equilibrium correction model to discuss impacts of monetary, labour and external factors on the German inflation. The approach presented is of eclectic character and allows for examination which variables representative for various inflation theories matter empirically when analysing inflation processes in Germany. The results obtained suggest that inflation in Germany is determined by adjustment processes on the market of production factors, external shocks embodied in import prices, level of capacity utilisation and monetary policy actions.
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Paper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number
334.
Find related papers by JEL classification: C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables C5 - Mathematical and Quantitative Methods - - Econometric Modeling E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
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