Research Brief
This publication by the Bundesbank Research Centre provides regular news about recent studies and discussion papers by Bundesbank research economists.
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Higher wages in Germany do not materially reduce trade imbalances Research Brief | 32nd edition – March 2020
Can wage hikes in Germany contribute to a reduction in global trade imbalances? A new study answers this question. Applying a general equilibrium model, it shows that, although wage hikes in Germany reduce the country’s trade surplus, the quantitative effects are relatively small and depend on the European Central Bank’s monetary policy response.
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How expectations of households and firms can impact the effectiveness of central bank communication Research Brief | 31st edition – February 2020
Recently, many central banks have begun communicating not just their current monetary policy, but also its probable predicted future path. However, the effectiveness of this communication hinges on how strongly it is able to influence the inflation expectations of households and firms. A standard property of macroeconomic models is that expectations respond very strongly to such announcements. A new theoretical study shows that the effects are much smaller in a model capable of matching survey evidence on expectations formation.
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Reasons for the low homeownership rate in Germany Research Brief | 30th edition – January 2020
Germany has the second lowest share of homeowners of all OECD countries. This is driven by housing policies that produce incentives to rent. New studies show that alternative policies could increase the homeownership rate and reduce wealth inequality.
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Price trends over the product life cycle and monetary policy Research Brief | 29th edition – October 2019
Consumer goods prices systematically depend on product age. A new study analyses this dependence and shows that it plays an important role in aggregate inflation and the optimal inflation rate.
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Connectedness between exchange rates: how machine learning opens up fresh insights Research Brief | 28th edition – September 2019
Are the exchange rates between certain currencies more closely connected than those of other currencies? Answers to this question can be provided by econometric methods. A new study shows how machine learning can deliver useful insights into this issue.