Publication

This paper analyzes the macroeconomic situation in Germany in combination with the situation of the rest of the euro area. To take the effect of the European monetary union on Germany into account, the author constructs a macroeconometric model that treats the euro area as consisting of two regions, Germany and the rest of the euro area. The model is set up as a dynamic simultaneous equations model and is used to study the impact of monetary policy or of exchange rate changes on economic activity in Germany and the euro area.