Monetary Union and Monetary Policy: A Review of the German Monetary Union

  • Jürgen von Hagen
Chapter

Abstract

On July 1, 1990, East and West Germany formed a monetary union which made the Deutsche Mark (DM) the only legal tender and the German Bundesbank the sole monetary authority in the unified currency area. While East Germany continued to exist as a political entity until October 2 of the same year, its currency, the Mark, was replaced by the DM immediately. For the socialist East German economy, monetary union meant the introduction of a modern financial and banking system, an essential step in the transition to a market economy, together with the adoption of a stable, convertible and reputable currency. For the Bundesbank, monetary union brought the challenge to conduct monetary policy in an enlarged currency area, in which the empirical qualities of a sizeable part of the aggregate demand for and supply of money were unknown.

Keywords

Monetary Policy Forecast Error Money Supply Monetary Union Money Demand 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.
This is a preview of subscription content, log in to check access.

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Buscher, Herbert (1984),’ The Stability of West German Demand for Money’, Weltwirtschaftliches Archiv 120, 256–78.CrossRefGoogle Scholar
  2. Deutsche Bundesbank, Monthly Reports, various issues.Google Scholar
  3. Deutsche Bundesbank (1991), Geschäftsbericht für 1990, Frankfurt.Google Scholar
  4. Deutsche Bundesbank (1992), Geschäftsbericht für 1991, Frankfurt.Google Scholar
  5. Deutsches Institut für Wirtschaftsforschung (DIW) (1992a),’ Gesamtwirtschaftliche und unternehmerische Anpassungsprozesse in Ostdeutschland’. Wochenbericht 59, No. 12/13Google Scholar
  6. Deutsches Institut für Wirtschaftsforschung (DIW) (1992b),’ Die Lage der Weltwirtschaft und der deutschen Wirtschaft im Frühjahr 1992’. Wochenbericht 59, No. 16/17.Google Scholar
  7. Hendry, David F. (1980),’ Predictive Failure and Econometric Modelling in Macroeconomics: The Transactions Demand for Money’ in: Paul Ormerod (ed.), Modelling the Economy London.Google Scholar
  8. Hendry, David F., Adrian R. Pagan and J. D. Sargan (1983),’ Dynamic Specification’, in: Zvi Grilliches and Michael D. Intrilligator (eds.) Handbook of Econometrics Amsterdam: North Holland.Google Scholar
  9. Hendry, David F., and Jean F. Richard(1982),’ On the Formulation of Empirical Models in Dynamic Econometrics’ Journal of Econometrics 20, 3–34.CrossRefGoogle Scholar
  10. Lane, Timothy D. (1992),’ Household Demand for Money in Poland: Theory and Evidence’. Working Paper WP/92/6, International Monetary FundGoogle Scholar
  11. Langfeldt, E. and Härmen Lehment (1980),’ Welche Bedeutung haben Sonder faktoren für die Erklärung der Geldnachfrage der BRD?’ Weltwirtschaftliches Archiv 116,669–84.CrossRefGoogle Scholar
  12. Neumann, Manfred J. M. and Jürgen von Hagen (1987),’ Theoretische und empirische Grundlagen von Geldmengenzielen’ in: A. Gutowski (ed.) Geldpolitische Regelbindung: theoretische Entwicklungen und empirische Befunde. Berlin: Duncker & Humblodt.Google Scholar
  13. Neumann, Manfred J. M. and Jürgen von Hagen (1991),’ Monetary Policy in Germany’ in: Dominick Salvatore and Michele Fratianni (eds.), Handbook of Monetary Policy, London: Greenwood Press.Google Scholar
  14. Röger, Werner, and Bernhard Herz (1990),’ Evaluating Conflicting Stability Results in German Money Demand Regressions’, Weltwirtschaftliches Archiv 126, 691–708.CrossRefGoogle Scholar
  15. Sargent, Thomas J. and Velde, F. R. (1990),’ The Analytics of German Monetary Unification’. Federal Reserve Bank of San Francisco Economic Review.Google Scholar
  16. Statistisches Bundesamt (1992), Statistisches Jahrbuch für das vereinte Deutschland. Wiesbaden.Google Scholar
  17. von Hagen, Jürgen (1986), Strategien kurzfristiger Geldmengensteuerung Hamburg: Weltarchiv.Google Scholar
  18. von Hagen, Jürgen (1988),’ Alternative Operating Regimes for Money Stock Control in West Germany: An Empirical Evaluation’. Weltwirtschaftliches Archiv 124, 89–109.CrossRefGoogle Scholar
  19. von Hagen, Jürgen (1989),’ Monetary Targeting Under Exchange Rate Constraints: The Bundesbank in the 1980s’. Federal Reserve Bank of St. Louis Review 71 No. 5, 53–69.Google Scholar
  20. von Hagen, Jürgen and Manfred J. M. Neumann (1988),’ Instability vs. Dynamics: A Study in West German Demand For Money’. Journal of Macroeconomics 10, 327–49.CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media New York 1994

Authors and Affiliations

  • Jürgen von Hagen

There are no affiliations available

Personalised recommendations