While the German economy may currently be a bright spot in Europe, it has faced substantial challenges in recent years. Moreover, tensions are rising regarding Germany's responsibilities and opportunities as a member of the European Monetary Union. Other studies have documented the difficulties...

It is difficult to identify the driving forces behind financial market developments as they are not directly observable. The paper argues that correlations between asset prices in different markets can be used to infer which of five macroeconomic factors that drive markets (growth and inflation...