• 1. Introduction
  • 1.1 Historical background
  • 1.2 Hypothesis and aim of the working paper
  • 1.3 Existing literature
  • 1.4 Structure of the working paper
  • 2. Qualitative Analysis: Historical events and the cause of conflict
  • 2.1 From the fall of the Berlin Wall until 6th February 1990
  • 2.2. 6th February 1990: The major clash between nationalgovernment and Bundesbank
  • 2.3 Divergent concepts for the appropriate conversion rate
  • 2.4 Further lines of conflict between national government andBundesbank
  • 2.5 The cause of conflict: independence versus credibility
  • 3. Quantitative Analysis: Measuring lost credibility
  • 3.1 The irrelevance of conventional measurements of central bankindependence to the problem in question
  • 3.2 Measuring inflationary expectations
  • 3.3 The conduct of an event-study
  • 4. The costs of lost credibility
  • 5. Conclusion
  • Appendix 1: Determination of prediction intervals within the framework of the linear single regression
  • Appendix 2: Identity of equations (1) and (3)
  • Bibliography