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The Impact of Exchange Rates on German Exports – Simulations with Error Correction Models

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  • Christian Grimme
  • Claire Thürwächter

Abstract

Since mid-2014 the euro has depreciated both nominally and in real effective terms. An analysis of the elasticities of goods and total exports to changes in various exchange rates shows that elasticity with regard to exchange rates ranges between -0.2 and -0.6 percentage points. Thanks to the euro’s depreciation in the first quarter, German exports will receive a stimulus of 0.8 to 1.0 percentage points this year and of 0.5 to 0.6 percentage points in the year ahead.

Suggested Citation

  • Christian Grimme & Claire Thürwächter, 2015. "The Impact of Exchange Rates on German Exports – Simulations with Error Correction Models," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 68(20), pages 35-38, October.
    • Handle: RePEc:ces:ifosdt:v:68:y:2015:i:20:p:35-38
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    References listed on IDEAS

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    1. Steffen Elstner & Christian Grimme & Thomas Siemsen, 2010. "The largest expanding markets for German exports are in Asia and Eastern Europe," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 63(16), pages 22-25, August.
    2. Zeddies, Götz, 2009. "Exportweltmeister trotz Euro-Höhenflug: Zum Einfluss der Wechselkurse auf die deutschen Ausfuhren," Wirtschaft im Wandel, Halle Institute for Economic Research (IWH), vol. 15(6), pages 247-255.
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    Cited by:

    1. Christoph Fischer & Oliver Hossfeld & Karin Radeck, 2018. "On the Suitability of Alternative Competitiveness Indicators for Explaining Real Exports of Advanced Economies," Open Economies Review, Springer, vol. 29(1), pages 119-139, February.
    2. Bofinger, Peter & Schnabel, Isabel & Feld, Lars P. & Schmidt, Christoph M. & Wieland, Volker, 2015. "Zukunftsfähigkeit in den Mittelpunkt. Jahresgutachten 2015/16 [Focus on Future Viability. Annual Report 2015/16]," Annual Economic Reports / Jahresgutachten, German Council of Economic Experts / Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung, volume 127, number 201516.
    3. Christian Grimme & Magnus Reif & Timo Wollmershäuser, 2016. "The Impact of the British Vote in Favour of a Brexit on the German Economy in 2016/17," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 69(13), pages 38-43, July.
    4. Christian Grimme & Robert Lehmann, 2020. "The ifo Export Climate – A Leading Indicator to Forecast German Export Growth," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 20(04), pages 36-42, January.
    5. Timo Wollmershäuser & Wolfgang Nierhaus & Tim Oliver Berg & Christian Breuer & Johanna Garnitz & Christian Grimme & Atanas Hristov & Nikolay Hristov & Wolfgang Meister & Magnus Reif & Felix Schröter &, 2015. "Ifo Economic Forecast 2015/2017: Modest Upswing Continues," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 68(24), pages 23-66, December.

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    More about this item

    JEL classification:

    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models

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