Well it does sound like your GSD (German shepherd dog) has an active allergy condition. The challenging thing about allergies is that their are almost always a myriad of things that can trigger an allergic reaction in your dog. Common allergens include:
1) Grass, trees, an other things in the environment. These allergens usually result in an allergic condition known as atopy. There are two ways to help definitively diagnose what your dog is allergic to.
a) Intradermal Skin Test - usually done by a veterinary dermatologist.
b) Allergy Blood Test (Serology) - next best test to the skin test and it can usually be done by your local veterinarian.
In either case, once you identify the allergens, a dermatology lab can make an "allergy" vaccine that your give to your dog to help desensitize them to the allergens, therefore reducing the frequency and severity of the allergic outbreaks. The allergy vaccine works approximately 80-85% of the time, with 5% of these dogs being totally cured of their allergies.
2) Food - Certain food items (ie proteins, carbohydrates) can trigger an allergic reaction. Usually, but not always, this type of allergy manifests with GI signs (ie diarrhea, vomiting) as well as skin issues. Strict food trials are the best for this component. The trick is to find a "novel" (new) protein and carb that your dog's GI tract has not been exposed to before (ie fish, rabbit, duck, and even kangaroo)and stick with the diet for at least 6-8 weeks with NO OTHER sources of food, including treats. This is the hard thing for some people because they can't resist to give their dog a treat or give up the food trial after only a few weeks.
3) Staph Bacteria and Yeast In the Skin - It is common for some dogs (and cats) to actually be allergic to the bacteria (Staphylococcus) and yeast that is normally found in their skin. This can be diagnosed with a skin test usually and be managed with antibiotics and antifungals.
Other helpful things include:
1) Daily omega fatty acid supplement (ie Derm Caps) - works synergistically antihistamines to reduce inflammation.
2) Flea control - Since flea saliva is a common allergen to dogs, it is important to use a high quality topical flea product. My favorites are Advantage and Frontline Plus. You can go to www.almostfreefleaproducts.com
for the best prices I have found. You can save 40 to 70%.
I hope this answers your question. If not I am available for follow up questions.