 German Exports on the Rise: Domestic Demand Should FollowMechthild Schrooten and Isabel Teichmann Weekly Report, 2010, vol. 6, issue 31, 231-236 Abstract: German exports suffered a sharp decline during the international economic and financial crisis. But recently a strong turnaround has taken place. Macroeconomic stimulus measures in numerous countries have likely contributed to this export recovery. Germany's manufacturers are at the forefront of the resurgence in exports. The mechanical engineering, chemicals, and automotive industries in particular have realized remarkable export surpluses. Germany's current account surplus has risen considerably over the last ten years. As a result, Germany has cemented its position as a net creditor and investor in the international financial market. The challenge now is to link the strength of Germany's exporting industries to the domestic demand. In doing so, long-term and stable growth for the overall economy could be reached. In short, Germany must overcome the dichotomy between its strong export economy and weak domestic demand. One strategy for strengthening domestic demand could be to relax the policy of wage restraint pursued in the years prior to the crisis. Keywords: Trade; Open Economy Macroeconomics; International Relations (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:diw:diwwrp:wr6-31 Access Statistics for this article More articles in Weekly Report from DIW Berlin, German Institute for Economic Research Contact information at EDIRC. |
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