International Finance Discussion Papers (IFDP)
January 1992
German Unification and the European Monetary System: A Quantitative Analysis
Gwyn Adams, Lewis Alexander, and Joseph Gagnon
Abstract:
This paper uses a macroeconomic model with rational expectations to analyze issues related to German unification. A principal focus of the paper is the effect of unification on member countries of the European Monetary System. Under certain conditions, German unification has a contractionary effect on other EMS countries. We explore the implications for EMS and other countries of alternative German fiscal and monetary policies.
PDF: Full Paper
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