This study aims 10 examine how the government, thc Bundesbank and the wage bargainers reacted to the rapid increase in inflation, and how they interacted with each other to fight inflation between 1973 and 1975 mainly with primary sources collected in Germany. This examination leads to the conclusion that policy making by both the government the Bundesbank was well-coordinated not only in a high inflationary period but also in recession. This is totally different from static models assumed by earlier literature in comparative political economy, such as studies regarding central bank independence and coordination of wage bargaining.

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