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Declining Output Volatility in Germany: Impulses, Propagation, and the Role of the Monetary Policy

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  • Ulrich Fritsche

    (German Institute of Economic Research)

  • Vladimir Kuzin

    (Goethe-University Frankfurt)

Abstract

This paper investigates the effect of economic integration on the ability of firms to maintain a collusive understanding about staying out of each other's markets. The paper distinguishes among different types of trade costs: ad valorem, unit, fixed. It is shown that for a sufficient reduction of ad valorem trade costs, a cartel supported by collusion on either quantities or prices will be weakened, thus integration is pro-competitive. If integration consists of a reductions in unit (fixed) trade costs a price setting cartel is strengthened (unaffected), while a quantity setting one is weakened.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Ulrich Fritsche & Vladimir Kuzin, 2005. "Declining Output Volatility in Germany: Impulses, Propagation, and the Role of the Monetary Policy," Money Macro and Finance (MMF) Research Group Conference 2005 70, Money Macro and Finance Research Group.
    • Handle: RePEc:mmf:mmfc05:70
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    Cited by:

    1. Wolf Heinrich Reuter & Oļegs Tkačevs & Kārlis Vilerts, 2022. "Fiscal rules and volatility: the role of stabilising properties and compliance," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 49(1), pages 21-52, February.
    2. Konstantin A. Kholodilin & Erik Klär, 2007. "Dem Konjunkturzyklus auf der Spur: zur Prognose konjunktureller Wendepunkte in Deutschland," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 76(4), pages 8-20.
    3. Christian Aßmann & Jens Hogrefe & Roman Liesenfeld, 2009. "The decline in German output volatility: a Bayesian analysis," Empirical Economics, Springer, vol. 37(3), pages 653-679, December.
    4. Magnus Reif, 2020. "Macroeconomics, Nonlinearities, and the Business Cycle," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 87.
    5. Magnus Reif, 2022. "Time‐Varying Dynamics of the German Business Cycle: A Comprehensive Investigation," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 84(1), pages 80-102, February.

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    More about this item

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation

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