Identifying Determinants of Germany's International Price Competitiveness: A Structural VAR Approach

The paper employs a structural vector auto-regression (SVAR) along the lines of Blanchard and Quah (1989) and Clarida and Gali (1994) to identify the sources of changes in German international price competitiveness over the past 30 years. This leads to a separation of the driving forces of the real exchange rate into real demand, supply, and...