Hayo, Bernd; Hofmann, Boris - Volkswirtschaft Abteilung, Fachbereich … - 2005
. Theoretical considerations suggest that this stronger response to the output gap may rather be due to a higher interest rate … based on the estimated interest rate reaction functions suggest that German interest rates would not have been lower under a …-run real interest rate for the EMU period. Adjusting the Bundesbank reaction function for the lower long-run real interest rate …