This paper analyses the inflation rate in Germany by means of a common trends model. Starting from an IS-LM model of the open economy, we conduct a cointegration analysis from which we obtain plausible long-run relationships. In the next step, we identify structural shocks with permanent and...

In this paper we analyze the West German labour market by means of a cointegrated structural VAR model. We find sensible stable long-run relationships that are interpreted as a labour demand, a wage setting and a goods market equilibrium. In order to study the dynamic behaviour of the model we...