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Opting out of the great inflation : German monetary policy after the break down of Bretton Woods
(2009)
- 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 policy-makers at the time. JEL Classification: E31, E32, E41, E52, E58
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Waren wir zu höflich zueinander? : Europa am Scheideweg: Welche Richtungsentscheidungen sind als Antwort auf die Krise nötig?
(2012)
- Interview. Ein Gespräch mit Prof. Dr. Otmar Issing (Mitte) und Prof. Dr. Bertram Schefold. Die Fragen stellte Dr. Muriel Büsser, Referentin für Öffentlichkeitsarbeit, House of Finance.
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Die Krise der Europäischen Währungsunion : einige Lösungsvorschläge missachten demokratische Prozesse und geltendes Recht
(2012)
- Wie in der Medizin muss der Therapie die Diagnose vorausgehen. Allzu viele Vorschläge zur Lösung der Krise gehen nicht zuletzt deshalb in die falsche Richtung, weil sie eine adäquate Ursachenanalyse vermissen lassen. Wird der Fiskalpakt Europa aus der Krise führen? Die Europäische Währungsordnung ist ein Produkt politischer Entscheidungen, gegossen in europäisches und nationales Recht. Wie glaubwürdig ist das Versprechen, durch neues Recht, härtere vertragliche Bestimmungen, Fehlverhalten in Zukunft zu verhindern, wenn das geltende Recht so gering geachtet wird?
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Lessons for monetary policy: what should the consensus be?
(2011)
- This paper outlines important lessons for monetary policy. In particular, the role of inflation targeting, which was much acclaimed prior to the financial crisis and since then has not lost much of its endorsement, is critically reviewed. Ignoring the relation between monetary policy and asset prices, as is the case in this monetary policy approach, can lead to financial instability. In contrast, giving, inter alia, monetary factors a role in central banks’ policy decisions, as is done in the ECB’s encompassing approach, helps prevent these potentially harmful side effects and thus allows for fostering financial stability. Finally, this paper makes a case against increasing the central banks’ inflation target. JEL Classification: E44, E52, E58 Keywords: Inflation Targeting, Asset Prices, Financial Stability, ECB
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Der Weg aus der Krise : mehr Europa! Welches Europa?
(2012)
- Vortrag im Rahmen der Weimarer Reden 11. März 2012: - Einführung - Was ist mit „Europa“ gemeint? - Europa als politisches Ziel - Integration über die Wirtschaft - Die Rolle der einheitlichen Währung - Dimensionen der Krise - Transferunion, Fiskalunion, Politische Union
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New financial order : recommendations by the Issing Committee ; preparing G-20 – Washington, November 15, 2008
(2009)
- Content New Financial Architecture (Short Version) 1. Purpose of the paper – causes of the crisis 2. Recommendations 2.1. Incentives 2.2. Transparency 2.3. Regulation and Supervision 2.4. International Institutions 3. Concluding remarks Appendix (Full text) A 1. Causes of the crisis A 2. Improving the Framework A 2.1. Incentives A 2.2. Transparency A 2.3. Regulation and Supervision A 2.4. International Institutions A 3. Concluding remarks
