We assess to what extent wage inflation policies in Germany could contribute to an economic rebalancing in the euro … and output in Germany and the rest of the euro area. The duration of constant interest rates and expectations about the … consists of Germany, the rest of the euro area, and the rest of the world. …

This paper estimates a medium-scale open economy DSGE model for Germany and the rest of the Euro Area (REA). The … parameter estimates indicate that there is a modest degree of structural heterogeneity between Germany and the rest of the Euro … Area. In particular, (i) the private sector in Germany tends to adjust its capital stock faster than its counterpart in the …