Economic Implications of German Unification for the Federal Republic and the Rest of the World

Download or read book Economic Implications of German Unification for the Federal Republic and the Rest of the World written by Mr.Paul R. Masson and published by International Monetary Fund. This book was released on 1990-09-01 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt: The economic effects of German unification are first discussed in the context of a global saving/investment model. Next, simulations of MULTIMOD are presented, suggesting for the FRG an initial increase in long-term real interest rates equal to 3/4 of a percentage point, increased output, a temporary half-point rise in inflation, a modest real appreciation of the deutsche mark, and a reduction of the (combined GDR and FRG) current account surplus equal to 2 percent of GNP. Effects on the rest of the world seem to be relatively small. Different policies are examined within the EMS, and other simulation studies are surveyed.