According to the bivariate mixture hypothesis (BMH) as proposed by Tauchen and Pitts (1983) and Harris (1986,1987) the daily price changes and the correspond-ing trading volume on speculative markets follow a joint mixture of distributions with the unobservable number of daily information events...

This paper analyses the empirical performance of a New Keynesian stickyprice model with delayed effects of monetary impulses on inflation and output for the German pre-EMU economy. The model is augmented with rule-ofthumb behaviour in consumption and price setting. Using recently developed...