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Predictability of future economic growth and the credibility of different monetary regimes in Germany, 1870 - 2003

Author

Listed:
  • Markus Baltzer

    (University of Tuebingen)

  • Gerhard Kling

    (Utrecht School of Economics)

Abstract

"A regime with a high persistence of inflation and, hence, low credibility exhibits a high level of predictability of economic growth using the yield curve as indicator. Our study tries to quantify the degree of anticipation of economic growth and links this to the capability of regimes to fight against inflation. We focus on Germany and collect data from 1870 to 2003. The period of the Classical Gold Standard exhibited the highest credibility compared to the interwar period, the Bretton Woods and free float era. The reliability of the Bretton Woods agreement deteriorated years before the official break down in 1971."

Suggested Citation

  • Markus Baltzer & Gerhard Kling, 2005. "Predictability of future economic growth and the credibility of different monetary regimes in Germany, 1870 - 2003," Working Papers 5023, Economic History Society.
    • Handle: RePEc:ehs:wpaper:5023
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    References listed on IDEAS

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    More about this item

    Keywords

    credibility; term structure; yield curve;
    All these keywords.

    JEL classification:

    • N13 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: Pre-1913
    • N14 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: 1913-
    • E27 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Forecasting and Simulation: Models and Applications
    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects

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