Time‐Varying Dynamics of the German Business Cycle: A Comprehensive Investigation*

Artikel

This paper provides insights into the time‐varying dynamics of the German business cycle over the last five decades. To do so, I employ an open‐economy time‐varying parameter VAR with stochastic volatility, which I estimate by quasi‐Bayesian techniques. The reduced‐form analysis reveals substantial shifts in the variables’ long‐run growth rates and shock volatilities over time. German trend inflation has strongly decreased and settled at a historically low level. GDP growth volatility exhibits marked fluctuations over time and has dropped to historically low levels only after the global financial crisis. The structural analysis employs externally identified oil supply shocks along with a recursive identification scheme to identify key macroeconomic shocks. The analysis reveals strong fluctuations in both the impact responses of macroeconomic aggregates to these shocks and the shock propagation processes. Thus, I conclude that business cycle stabilization in Germany is driven by both good policy and good luck.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: Oxford Bulletin of Economics and Statistics ; ISSN: 1468-0084 ; Volume: 84 ; Year: 2021 ; Issue: 1 ; Pages: 80-102

Classification and Topics

• Classification: Wirtschaft

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Reif, Magnus
• Event: Veröffentlichung
• (who): Wiley
• (where): Hoboken, NJ
• (when): 2021

Further information

• DOI: doi:10.1111/obes.12464
• Handle: http://hdl.handle.net/10419/284844
• Last update: 10.03.2025, 11:45 AM CET