German Exports to the Euro Area - A Cointegration Approach

Sabine Stephan

No 06-2005, IMK Working Paper from IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute

Abstract: This paper analyses the determinants of German exports to the euro area, which is by far the biggest market for German products. Four conditional error-correction models based on regionally disaggregated data are developed. One specification includes EMU industrial production and a real external value based on consumer prices, the other three use different EMU investment aggregates, the corresponding real external values and a proxy for European market integration to explain exports. The models perform equally well in a number of diagnostic tests. For short-term forecasts, however, the model using industrial production seems to be the best, since it outperforms the other models in terms of one-step ahead out-of-sample forecasts. Furthermore, the explanatory variables of this equation (industrial production and consumer prices) are easier to forecast than investment aggregates and the corresponding prices.

Keywords: Export Function; Income and Price Elasticity of Exports; Intra-EMU Trade; Error Correction Model; Forecasting (search for similar items in EconPapers)
JEL-codes: C22 C52 F47 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2005-09
New Economics Papers: this item is included in nep-eec, nep-for and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.boeckler.de/pdf/p_imk_wp_06_2005.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:imk:wpaper:06-2005

Access Statistics for this paper

More papers in IMK Working Paper from IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute Contact information at EDIRC.
Bibliographic data for series maintained by Sabine Nemitz ().