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Predictability of future economic growth and the credibility of monetary regimes in Germany, 1870-2003

Baltzer, Markus; Kling, Gerhard

Authors

Markus Baltzer

Gerhard Kling



Abstract

Our study tries to quantify the predictability of economic growth and links it to the capability of regimes to fight against inflation. A regime with a high persistence of inflation and, hence, low credibility exhibits a high level of predictability of economic growth using the yield curve as indicator. Based on structural VAR models, we evaluate the credibility of monetary regimes in Germany from 1870 to 2003. The period of the Classical Gold Standard exhibited the highest credibility compared to the interwar period, the Bretton Woods and free float era. The reliability of the Bretton Woods agreement deteriorated years before the official breakdown in 1971.

Citation

Baltzer, M., & Kling, G. (2007). Predictability of future economic growth and the credibility of monetary regimes in Germany, 1870-2003. Applied Economics Letters, 14(6), 401-404. https://doi.org/10.1080/13504850500461456

Journal Article Type Article
Publication Date May 1, 2007
Journal Applied Economics Letters
Print ISSN 1350-4851
Electronic ISSN 1466-4291
Publisher Taylor & Francis (Routledge)
Peer Reviewed Peer Reviewed
Volume 14
Issue 6
Pages 401-404
DOI https://doi.org/10.1080/13504850500461456
Keywords economic growth, monetary regimes, Germany
Public URL https://uwe-repository.worktribe.com/output/1027948
Publisher URL http://dx.doi.org/10.1080/13504850500461456


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