Who gains from nominal devaluation? An empirical assessment of Euro-area exports and imports
In early 2013 rumors about the Euro-appreciation gained momentum, which may lead to decreases in exports and increases in imports of the member states. Therefore, we investigate the impact of changes in the nominal Euro exchange rate vis-à-vis major currencies on export and import performance of nine different Euro-area-countries. To disentangle the true equilibrium elasticities SURE system error correction models (SSECM) are estimated for nominal exchange rate changes versus the rest of the world or other major currencies. To differentiate between price level changes and changes of the nominal exchange rate, a country's export and import equation is estimated using separately the nominal rate and the relative price/ unit labor cost as regressors. Results of Wald-tests indicate that assuming both variables to have the same influence on exports and imports is misleading. Whether the relative price/ unit labor costs elasticities are high or low depends crucially on which indicator is chosen, while the effect of nominal exchange rate changes can be estimated robustly for all countries in the sample. Especially France and Spain are hit by a Euro appreciation since their exports are highly exchange rate elastic. However, for France, this effect is at least partly offset by an also negative exchange rate elasticity of imports.
|Date of creation:||2013|
|Date of revision:|
|Contact details of provider:|| Postal: Statistisches Bundesamt, Gustav-Stresemann-Ring 11, 65180 Wiesbaden|
Phone: +49 611 - 752390
Fax: +49 611 - 752538
Web page: http://www.sachverstaendigenrat-wirtschaft.de/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Misato Sato & Antoine Dechezlepretre, 2015.
"Asymmetric industrial energy prices and international trade,"
LSE Research Online Documents on Economics
61278, London School of Economics and Political Science, LSE Library.
- Misato Sato & Antoine Dechezlepretre, 2015. "Asymmetric industrial energy prices and international trade," LSE Research Online Documents on Economics 63634, London School of Economics and Political Science, LSE Library.
- Antoine Dechezleprêtre & Misato Sato, 2015. "Asymmetric Industrial Energy Prices and International Trade," CEP Discussion Papers dp1337, Centre for Economic Performance, LSE.
- Misato Sato & Antoine Dechezleprï¿½tre, 2015. "Asymmetric industrial energy prices and international trade," GRI Working Papers 178, Grantham Research Institute on Climate Change and the Environment.
- Engle, Robert F & Granger, Clive W J, 1987.
"Co-integration and Error Correction: Representation, Estimation, and Testing,"
Econometric Society, vol. 55(2), pages 251-76, March.
- Engle, Robert & Granger, Clive, 2015. "Co-integration and error correction: Representation, estimation, and testing," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 39(3), pages 106-135.
- Marquez, Jaime & McNeilly, Caryl, 1988. "Income and Price Elasticities for Exports of Developing Countries," The Review of Economics and Statistics, MIT Press, vol. 70(2), pages 306-14, May.
- Stahn, Kerstin, 2006. "Has the impact of key determinants of German exports changed? Results from estimations of Germany's intra euro-area and extra euro-area exports," Discussion Paper Series 1: Economic Studies 2006,07, Deutsche Bundesbank, Research Centre.
- Ganguly, Srideep & Breuer, Janice Boucher, 2010. "Nominal exchange rate volatility, relative price volatility, and the real exchange rate," Journal of International Money and Finance, Elsevier, vol. 29(5), pages 840-856, September.
- Frederick L. Joutz & Stephan Danninger, 2007. "What Explains Germanyâ€™s Rebounding Export Market Share?," IMF Working Papers 07/24, International Monetary Fund.
When requesting a correction, please mention this item's handle: RePEc:zbw:svrwwp:042013. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ZBW - German National Library of Economics)
If references are entirely missing, you can add them using this form.