NBER WORKING PAPER SERIES EXCHANGE RATES, INFLATION, AND THE STERILIZATION PROBLEM: GERMANY, 1975-1981 Maurice Obstfeld Working Paper No. 963 NATIONAL BUREAU OF ECONOMIC RESEARCH 1050 Massachusetts Avenue Cambridge MA 02138 August 1982 Paper prepared for the International Seminar on Macroeconomics sponsored by the Naison des Sciences de l'Hoinnie and the National Bureau of Economic Research, University of Nannheim, June 20-22, 1982. I am grateful to Rama Seth for capable research assistance. Valuable comments and suggestions were made by the ISOM discussants and participants and by participants in the NBER's 1982 Summer Institute in International Studies, where this paper was also pre- sented. Conversations with Steve Symansky led to improvements in the paper. Financial support provided under National Science Foundation grant SES-8023081 is acknowledged with thanks. The research reported here is part of the NBER's research program in International Studies. Any opinions expressed are those of the author and not those of the National Bureau of Economic Research.