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The stability of German export demand equations – have German exports suffered from the strength of the euro?

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  • Florian Verheyen

Abstract

Since its introduction in 1999, the euro has shown pronounced swings against the US dollar and the British pound. In this study, we investigate whether this evolution has affected bilateral German exports to two of its major export destinations: the US and the UK. Applying the autoregressive distributed lags bounds testing approach, we find different elasticities of trade between the two export destinations. Our results show that the export demand equation for the US seems to be more stable than that for the UK. Furthermore, it seems that the short-run dynamics in particular have changed. Copyright Springer-Verlag Berlin Heidelberg 2014

Suggested Citation

  • Florian Verheyen, 2014. "The stability of German export demand equations – have German exports suffered from the strength of the euro?," International Economics and Economic Policy, Springer, vol. 11(4), pages 529-548, December.
    • Handle: RePEc:kap:iecepo:v:11:y:2014:i:4:p:529-548
    DOI: 10.1007/s10368-013-0260-9
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    More about this item

    Keywords

    German export demand equations; Stability; Cointegration; ARDL bounds testing approach; F10; F14; F40;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General

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