Summary
For the Federal Republic of Germany and for the period 1975–1985, the present study supports Friedman’s conjecture that a rise of the expected rate of inflation raises the rate of growth of money wages by the same amount, i.e. has no effect on employment. At all events, a systematic swap of “higher employment for higher inflation” was thus unlikely to succeed in the Federal Republic during the period under review.
Similar content being viewed by others
References
Cagan, Phillip, “The Monetary Dynamics of Hyperinflation”. In: Milton Friedman (Ed.),Studies in the Quantity Theory of Money. Chicago 1956, pp. 23–117.
Deutsche Bundesbank,Monthly and Annual Reports. Frankfurt, var. issues.
Deutsches Institut für Wirtschaftsforschung,Weekly Reports. Berlin, var. issues.
Dornbusch, Rudiger, Stanley Fischer,Macroeconomics. 3rd ed. New York 1984.
Friedman, Milton, “The Role of Monetary Policy”.The American Economic Review, Vol. 58, 1968, pp. 1–17.
Frisch, Helmut,Die Neue Inflationstheorie. Gättingen 1980.
Kmenta, Jan,Elements of Econometrics. 2nd ed. New York 1986.
Lipsey, Richard G., “The Relation between Unemployment and the Rate of Change of Money Wage Rates in the U.K., 1862-1957: A Further Analysis”.Economica, Vol. 27, 1960, pp. 1–32.
Mishkin, Frederic S., TheEconomics of Money, Banking, and financial Markets. Boston 1986.
Muth, John F., “Optimal Properties of Exponential Weighted Forecasts”.Journal of the American Statistical Association, Vol. 55, 1960, pp. 299–306.
—, “Rational Expectations and the Theory of Price Movements”.Econometrica, Vol. 29,1961, pp. 315–335.
Phillips, Alban W. H., “The Relation between Unemployment and the Rate of Change of Money Wage Rates in the U.K., 1861-1957”.Economica, Vol. 25, 1958, pp. 283–299.
Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung (German Council of Economic Experts),Annual Reports. Bonn, var. issues.
Samuelson, Paul A., Robert M. Solow, “The Problem of Achieving and Maintaining a Stable Price Level — Analytical Aspects of Anti-Inflation Policy”.The American Economic Review, Papers and Proceedings, Vol. 50, 1960, pp. 177–194.
Santomero, Anthony M., John J. Seater, “The Inflation — Unemployment Tradeoff: A Critique of the Literature”.Journal of Economic Literature, Vol. 16, 1978, pp. 499–544.
About this article
Cite this article
Richter, R., Diener, F. Phillips curves in West-Germany 1975–1985: On the role of the deutsche bundesbank as an expectation determining institution. Weltwirtschaftliches Archiv 123, 346–353 (1987). https://doi.org/10.1007/BF02706667
Issue Date:
DOI: https://doi.org/10.1007/BF02706667