German monetary and economic unification: are financial markets asking the right questions?

Authors

  • J.A. KREGEL

DOI:

https://doi.org/10.13133/2037-3643/10942

Keywords:

German reunification, Financial markets

Abstract

If stock markets evaluate the future prospects of the real economy, then the stock markets believe that German reunification has caused a marked deterioration in the prospects for the German people. The markets seem to have interpreted the terms of German monetary union as being inflationary. The author argues that the market apparently assumes that the east Germans have no valuable productive capacity and that they will spend all of their newly acquired marks in the West; this must be substantively wrong, and so must the assumption that a strong inflationary surge is inevitable.


JEL: P20, F36

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Published

2013-10-23

How to Cite

KREGEL, J. (2013). German monetary and economic unification: are financial markets asking the right questions?. PSL Quarterly Review, 43(174). https://doi.org/10.13133/2037-3643/10942

Issue

Vol. 43 No. 174 (1990)

Section

Editorial

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