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Investigating the impact of an appreciation of the euro in a small macroeconometric model of Germany and the euro area

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  • Meier, Carsten-Patrick

Abstract

Since the start of European monetary union, the macroeconomic situation in Germany can in many respects only be analyzed in combination with the situation in the rest of the euro area. To take this into account, a small macroeconometric model is constructed that models the euro area as consisting of two regions, Germany and the rest of the euro area. The rest of the world is treated as exogenous. Given problems with modelling the relevant relationships in a standard vector autoregression approach, the model is set up as a dynamic simultaneous equations model. The model is used to study the impact of monetary policy or of exchange rate changes on economic activity in Germany and the euro area.

Suggested Citation

  • Meier, Carsten-Patrick, 2004. "Investigating the impact of an appreciation of the euro in a small macroeconometric model of Germany and the euro area," Kiel Working Papers 1204, Kiel Institute for the World Economy (IfW Kiel).
    • Handle: RePEc:zbw:ifwkwp:1204
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    References listed on IDEAS

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    Cited by:

    1. Dovern, Jonas & Meier, Carsten-Patrick, 2006. "Macroeconomic aspects of structural labor market reforms in Germany," Kiel Working Papers 1295, Kiel Institute for the World Economy (IfW Kiel).

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    More about this item

    Keywords

    Macroeconometric model for Germany; euro area; appreciation;
    All these keywords.

    JEL classification:

    • E17 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Forecasting and Simulation: Models and Applications
    • F47 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Forecasting and Simulation: Models and Applications

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