Opting out of the great inflation: German monetary policy after the breakdown of Bretton Woods
During the turbulent 1970s and 1980s the Bundesbank established an outstanding reputation in the world of central banking. Germany achieved a high degree of domestic stability and provided safe haven for investors in times of turmoil in the international financial system. Eventually the Bundesbank p...
Gespeichert in:
| Format: | Buch |
|---|---|
| Sprache: | English |
| Veröffentlicht: |
Frankfurt am Main
Dt. Bundesbank
2009
|
| Schriftenreihe: | Discussion paper / Deutsche Bundesbank : Series 1, economic studies
2009,12 |
| Schlagworte: | |
| Online-Zugang: | Volltext Inhaltsverzeichnis |
| Zusammenfassung: | During the turbulent 1970s and 1980s the Bundesbank established an outstanding reputation in the world of central banking. Germany achieved a high degree of domestic stability and provided safe haven for investors in times of turmoil in the international financial system. Eventually the Bundesbank provided the role model for the European Central Bank. Hence, we examine an episode of lasting importance in European monetary history. The purpose of this paper is to highlight how the Bundesbank monetary policy strategy contributed to this success. We analyze the strategy as it was conceived, communicated and refined by the Bundesbank itself. We propose a theoretical framework (following Söderström, 2005) where monetary targeting is interpreted, first and foremost, as a commitment device. In our setting, a monetary target helps anchoring inflation and inflation expectations. We derive an interest rate rule and show empirically that it approximates the way the Bundesbank conducted monetary policy over the period 1975-1998. We compare the Bundesbank's monetary policy rule with those of the FED and of the Bank of England. We find that the Bundesbank's policy reaction function was characterized by strong persistence of policy rates as well as a strong response to deviations of inflation from target and to the activity growth gap. In contrast, the response to the level of the output gap was not significant. In our empirical analysis we use real-time data, as available to policymakers at the time. -- Inflation ; Price Stability ; Monetary Policy ; Monetary Targeting ; Policy Rules. |
| Beschreibung: | Auch im Internet verfügbar. - Zsfassung in dt. Sprache |
| Beschreibung: | 67 S. graph. Darst. |
| ISBN: | 9783865585189 9783865585196 |
Internformat
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| 264 | 1 | |a Frankfurt am Main |b Dt. Bundesbank |c 2009 | |
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| 520 | 8 | |a During the turbulent 1970s and 1980s the Bundesbank established an outstanding reputation in the world of central banking. Germany achieved a high degree of domestic stability and provided safe haven for investors in times of turmoil in the international financial system. Eventually the Bundesbank provided the role model for the European Central Bank. Hence, we examine an episode of lasting importance in European monetary history. The purpose of this paper is to highlight how the Bundesbank monetary policy strategy contributed to this success. We analyze the strategy as it was conceived, communicated and refined by the Bundesbank itself. We propose a theoretical framework (following Söderström, 2005) where monetary targeting is interpreted, first and foremost, as a commitment device. In our setting, a monetary target helps anchoring inflation and inflation expectations. We derive an interest rate rule and show empirically that it approximates the way the Bundesbank conducted monetary policy over the period 1975-1998. We compare the Bundesbank's monetary policy rule with those of the FED and of the Bank of England. We find that the Bundesbank's policy reaction function was characterized by strong persistence of policy rates as well as a strong response to deviations of inflation from target and to the activity growth gap. In contrast, the response to the level of the output gap was not significant. In our empirical analysis we use real-time data, as available to policymakers at the time. -- Inflation ; Price Stability ; Monetary Policy ; Monetary Targeting ; Policy Rules. | |
| 648 | 7 | |a 1975-1998 |2 stw | |
| 650 | 4 | |a Deutsche Bundesbank ; IND: k | |
| 650 | 4 | |a Deutschland ; IND: g | |
| 650 | 4 | |a Geldpolitik ; IND: s | |
| 650 | 4 | |a Geschichte - 1959-1998 | |
| 650 | 4 | |a Zentralbanksystem ; IND: s | |
| 650 | 7 | |a Deutschland |2 stw | |
| 650 | 7 | |a Geldgeschichte |2 stw | |
| 650 | 7 | |a Geldmengensteuerung |2 stw | |
| 650 | 7 | |a Geldpolitik |2 stw | |
| 650 | 7 | |a Inflationsbekämpfung |2 stw | |
| 650 | 7 | |a Reaktionsfunktion |2 stw | |
| 650 | 7 | |a Zinspolitik |2 stw | |
| 700 | 1 | |a Beyer, Andreas |d 1957- |e Sonstige |0 (DE-588)129194026 |4 oth | |
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Datensatz im Suchindex
| _version_ | 1804139203945037824 |
|---|---|
| adam_text | Titel: Opting out of the great inflation
Autor: Beyer, Andreas
Jahr: 2009
Contents
1 Introduction 1
2 Brief overview of inflation developments in selected industrial 3
countries in the period 1959-1998
2.1 Rise and fall of the Bretton Woods regime 4
2.2 The stylized facts 5
2.3 Explanations of the Great Inflation 6
3 Sound money and price stability in Germany 8
3.1 The legacy of the Bundesbank and stability-oriented monetary 8
policy
3.2 The conduct of policy under monetary targeting 13
4 Monetary targeting as a commitment device 20
5 The Conduct of Monetary Policy and Monetary Policy Rules 29
5.1 Brief reference to the literature 30
5.2 A comparison of empirically estimated policy rules 30
5.3 The role of money demand shocks 37
5.4 Summary 38
6 Conclusion 38
References 40-46
Lists of Tables and Figures
Table 2.1 Selected Macroeconomic Indicators for G7
Switzerland
Table 3.1 Numerical inputs for the derivation of the money growth
targets
Table 3.2 Monetary targets and their implementation
Table 5.1 Estimates of the extended reaction function, inflation
forward-looking (from t to t+4), change in output gap
from t-4 to t, real-time data
Table 5.2a The US. Estimates of the extended reaction function,
inflation forward-looking y-o-y (from t-3 to t+1) using
real-time inflation forecast
Table 5.2b The US. Estimates of the extended reaction function,
inflation forward-looking y-o-y (from t-3 to t+1)
Table 5.3 The UK. Estimates of the extended reaction function,
inflation forward-looking y-o-y (from t-3 to t+1)
47
50
51
56
57
58
59
Figure 2.1 Inflation in G7 countries and Switzerland
Figure 2.2 Average nominal interest rates in the 1970s
Figure 2.3 Average inflation and real growth rates in the 1970s
Figure 3.1 Money Growth Targets 1975-1998
Figure 5.1 Inflation in Germany and the US (consumer prices,
quarterly data)
Figure 5.2a Interest Rates and Inflation in Germany
Figure 5.2b Interest Rates and Inflation in the US
48
49
49
52
53
54
55
|
| any_adam_object | 1 |
| author_GND | (DE-588)129194026 |
| building | Verbundindex |
| bvnumber | BV035556721 |
| classification_rvk | QB 910 |
| collection | ebook |
| ctrlnum | (OCoLC)552415990 (DE-599)BVBBV035556721 |
| dewey-full | 332.4943 |
| dewey-hundreds | 300 - Social sciences |
| dewey-ones | 332 - Financial economics |
| dewey-raw | 332.4943 |
| dewey-search | 332.4943 |
| dewey-sort | 3332.4943 |
| dewey-tens | 330 - Economics |
| discipline | Wirtschaftswissenschaften |
| era | 1975-1998 stw |
| era_facet | 1975-1998 |
| format | Book |
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| id | DE-604.BV035556721 |
| illustrated | Illustrated |
| indexdate | 2024-07-09T21:40:21Z |
| institution | BVB |
| isbn | 9783865585189 9783865585196 |
| language | English |
| oai_aleph_id | oai:aleph.bib-bvb.de:BVB01-017612524 |
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| series2 | Discussion paper / Deutsche Bundesbank : Series 1, economic studies |
| spelling | Opting out of the great inflation German monetary policy after the breakdown of Bretton Woods Andreas Beyer ... Frankfurt am Main Dt. Bundesbank 2009 67 S. graph. Darst. txt rdacontent n rdamedia nc rdacarrier Discussion paper / Deutsche Bundesbank : Series 1, economic studies 2009,12 Auch im Internet verfügbar. - Zsfassung in dt. Sprache During the turbulent 1970s and 1980s the Bundesbank established an outstanding reputation in the world of central banking. Germany achieved a high degree of domestic stability and provided safe haven for investors in times of turmoil in the international financial system. Eventually the Bundesbank provided the role model for the European Central Bank. Hence, we examine an episode of lasting importance in European monetary history. The purpose of this paper is to highlight how the Bundesbank monetary policy strategy contributed to this success. We analyze the strategy as it was conceived, communicated and refined by the Bundesbank itself. We propose a theoretical framework (following Söderström, 2005) where monetary targeting is interpreted, first and foremost, as a commitment device. In our setting, a monetary target helps anchoring inflation and inflation expectations. We derive an interest rate rule and show empirically that it approximates the way the Bundesbank conducted monetary policy over the period 1975-1998. We compare the Bundesbank's monetary policy rule with those of the FED and of the Bank of England. We find that the Bundesbank's policy reaction function was characterized by strong persistence of policy rates as well as a strong response to deviations of inflation from target and to the activity growth gap. In contrast, the response to the level of the output gap was not significant. In our empirical analysis we use real-time data, as available to policymakers at the time. -- Inflation ; Price Stability ; Monetary Policy ; Monetary Targeting ; Policy Rules. 1975-1998 stw Deutsche Bundesbank ; IND: k Deutschland ; IND: g Geldpolitik ; IND: s Geschichte - 1959-1998 Zentralbanksystem ; IND: s Deutschland stw Geldgeschichte stw Geldmengensteuerung stw Geldpolitik stw Inflationsbekämpfung stw Reaktionsfunktion stw Zinspolitik stw Beyer, Andreas 1957- Sonstige (DE-588)129194026 oth Deutsche Bundesbank Discussion paper Series 1, economic studies ; 2009,12 (DE-604)BV017594637 2009,12 http://hdl.handle.net/10419/27666 Verlag kostenfrei Volltext HBZ Datenaustausch application/pdf http://bvbr.bib-bvb.de:8991/F?func=service&doc_library=BVB01&local_base=BVB01&doc_number=017612524&sequence=000002&line_number=0001&func_code=DB_RECORDS&service_type=MEDIA Inhaltsverzeichnis |
| spellingShingle | Opting out of the great inflation German monetary policy after the breakdown of Bretton Woods Deutsche Bundesbank ; IND: k Deutschland ; IND: g Geldpolitik ; IND: s Geschichte - 1959-1998 Zentralbanksystem ; IND: s Deutschland stw Geldgeschichte stw Geldmengensteuerung stw Geldpolitik stw Inflationsbekämpfung stw Reaktionsfunktion stw Zinspolitik stw |
| title | Opting out of the great inflation German monetary policy after the breakdown of Bretton Woods |
| title_auth | Opting out of the great inflation German monetary policy after the breakdown of Bretton Woods |
| title_exact_search | Opting out of the great inflation German monetary policy after the breakdown of Bretton Woods |
| title_full | Opting out of the great inflation German monetary policy after the breakdown of Bretton Woods Andreas Beyer ... |
| title_fullStr | Opting out of the great inflation German monetary policy after the breakdown of Bretton Woods Andreas Beyer ... |
| title_full_unstemmed | Opting out of the great inflation German monetary policy after the breakdown of Bretton Woods Andreas Beyer ... |
| title_short | Opting out of the great inflation |
| title_sort | opting out of the great inflation german monetary policy after the breakdown of bretton woods |
| title_sub | German monetary policy after the breakdown of Bretton Woods |
| topic | Deutsche Bundesbank ; IND: k Deutschland ; IND: g Geldpolitik ; IND: s Geschichte - 1959-1998 Zentralbanksystem ; IND: s Deutschland stw Geldgeschichte stw Geldmengensteuerung stw Geldpolitik stw Inflationsbekämpfung stw Reaktionsfunktion stw Zinspolitik stw |
| topic_facet | Deutsche Bundesbank ; IND: k Deutschland ; IND: g Geldpolitik ; IND: s Geschichte - 1959-1998 Zentralbanksystem ; IND: s Deutschland Geldgeschichte Geldmengensteuerung Geldpolitik Inflationsbekämpfung Reaktionsfunktion Zinspolitik |
| url | http://hdl.handle.net/10419/27666 http://bvbr.bib-bvb.de:8991/F?func=service&doc_library=BVB01&local_base=BVB01&doc_number=017612524&sequence=000002&line_number=0001&func_code=DB_RECORDS&service_type=MEDIA |
| volume_link | (DE-604)BV017594637 |
| work_keys_str_mv | AT beyerandreas optingoutofthegreatinflationgermanmonetarypolicyafterthebreakdownofbrettonwoods |