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adjustment aggregate demand Alternative simulations aspects of unification assumptions Bundesbank Chart consumption currency union depreciation Despite Deutsche Bundesbank East German capital East German economy East German labor East Germany effective exchange rate effects of unification ERM countries ERM currencies European Union exogenous fiscal balance fiscal expansion fiscal policy fiscal transfers focused forward-looking German monetary policy German unification Growth and Inflation inflation in Germany investment labor supply less optimistic scenario long run long-term interest rates lower macroeconomic macroeconomic variables marginal product McKibbin model simulations monetary authority MULTIMOD MX3 model O0 oo original studies output growth percent of GDP permanent income persistence potential output pressures raise Rate and Real rates in Germany rational expectations real effective exchange real long-term interest Real Wages recession in 1993 reference scenario short-term interest rates simulations of unification stock and flow submodels three models Treuhand U.S. dollar Unemployment Rate unified Germany wage rate