Alternative Theories of Output, Unemployment, and Inflation in Germany: 1960–1985

ISBN-13: 9783540509080 / Angielski / Miękka / 1989 / 206 str.

Christine Sauer

Opis

This book is motivated by the disagreement among Monetarist, Keynesian, and New Classical economists about the short-term determinants of output, unemployment, and inflation. It exposes the reader to a synthesis modeling approach which allows the derivation of the opposing theories as special cases from a single general framework, so that the macroeconomic controversy is reduced to tests of alternative statistical hypotheses. While similar studies have been conducted for the U.S. economy, this study is the first to consider an open economy and "let the data speak" about the determinants of output, unemployment, and inflation in Germany. The analysis proceeds in two steps. First, the empirical validity of commonly maintained hypotheses about the behavior of macrovariables under fixed and flexible exchange rates is assessed. The results provide useful information for the specification of a structural model of the German economy. Second, the general macrodynamic model is specified which implies the opposing schools of thought as special cases. The competing hypotheses are tested with nested regression equations to avoid the observational equivalence problem.

Spis treści

I Introduction.- II The German Economy: 1960–1985.- 1. Institutional Arrangements.- 2. Twenty-Five Years of Economic Policy Making.- 3. The Performance of the German Economy: 1960–1985.- III Survey and Critique of the Literature: Empirical Studies of the German Macroeconomy.- 1. Introduction.- 2. Impulse-Theoretic Models.- 3. Monetarist, Keynesian, and Rational Expectations Models.- 4. Structural Models of Other Open Economies.- 5. Phillips Curve Studies.- 6. Causality Studies.- 7. A Critical Evaluation of Previous Studies of Germany.- IV Fixed Versus Flexible Exchange Rates in the Open Economy: Theory and Reality.- 1. Introduction.- 2. Open Economy Macroeconomics: A Synthesis View.- 2.1. The Theoretical Framework.- 2.2. The Fixed Exchange Rate Case.- 2.3. The Flexible Exchange Rate Case.- 2.4. Summary and Critique of the Synthesis View.- 3. Open Economy Macroeconomics and Reality.- 3.1. Theoretical Considerations.- 3.2. Methodological Considerations.- 3.3. Empirical Realities.- 3.4. Open Economy Macroeconomics and Reality: Where do We Stand?.- V Monetarist, Keynesian, and New Classical Theories of Output, Unemployment, and Inflation in Germany: 1960–1985.- 1. Introduction.- 2. The General Theoretical Framework.- 2.1. The Structural Equations of the General Model.- 2.2. The Relationship of Output and Unemployment.- 3. Alternative Views of Unemployment, Output, and Inflation.- 3.1. The Monetarist Specification.- 3.2. The New Classical Specification.- 3.3. The Keynesian Specification.- 4. Empirical Evidence.- 4.1. The Unanticipated Money Growth Series.- 4.2. Technical Notes.- 4.3. The Unemployment Equation: Monetarist versus New Classical Theories.- 4.4. The Output Equation: Monetarist versus New Classical Theories.- 4.5. The Inflation Equation: Monetarist versus Keynesian Theories.- 5. A “Correct” Model of the German Economy? Conclusions and Outlook.- Table Appendix to Chapter V.- Data Sources.