The role of the IFO business climate indicator and asset prices in German monetary policy

Elmer Sterken

We analyze the role of forward-looking indicators, like the IFO business climate indicator and asset prices, in German monetary transmission. We show that the use of both the IFO indicator and asset prices improves the performance and interpretation of a Vector AutoRegression (VAR) model of German monetary transmission. First, we show that the Bundesbank responded more intensively to changes in the IFO indicator than to changes in GDP. Secondly, we address the role of housing and equity prices. We demonstrate that especially housing prices help to give a more accurate description of the recent history of German monetary policy.

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Year of publication:	2004
Authors:	Sterken, Elmer
Publisher:	Munich : Univ., Center for Economic Studies [u.a.]
Subject:	Frühindikator \| Leading indicator \| Börsenkurs \| Share price \| Immobilienpreis \| Real estate price \| Geldpolitische Transmission \| Monetary transmission \| Geldpolitik \| Monetary policy \| Schätzung \| Estimation \| Deutschland \| Germany

Extent:	33 S graph. Darst
Series:	CESifo working papers : the international platform of Ludwig-Maximilians University's Center for Economic Studies and the Ifo Institute. - Munich : CESifo, ISSN 1617-9595, ZDB-ID 2023380-2. - Vol. 1204
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Arbeitspapier ; Working Paper ; Graue Literatur ; Non-commercial literature
Language:	English
Notes:	Internetausg.: http://www.cesifo.de/~DocCIDL/cesifo1_wp1204.pdf Literaturverz. S. 30 - 33
Classification:	C82 - Methodology for Collecting, Estimating, and Organizing Macroeconomic Data ; C22 - Time-Series Models ; C53 - Forecasting and Other Model Applications
Source:	ECONIS - Online Catalogue of the ZBW

Persistent link: https://www.econbiz.de/10002176418