International spillovers and feedback: Modelling in a disequilibrium framework

Peter Winker and Martin Beck

No 00-36, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: German unifikation hit the West German economy in a prosperous and appeared as a huge demand shock at least for the first few quarters. This combination resulted in a major increase of imports from the main trading partners of West Germany, which may have helped to cushion recessionary trends within these countries. In this paper the modelling of international trade in a disequilibrium framework and the consequences of German unification on trade flows are in the centre of interest. For this purpose, a macroeconomic disequilibrium model for the German economy is extended by submodels for bilateral trade flows vis a vis major trading partners. These submodels treat the trade flows as well as foreign and domestic production and capacity utilization as edogenous in a vector error correction framework. Consequently, the model allows for spillovers, like those resulting from the demand shock of German unification, to effect not only German trade flows, but also real variables in other countries leading to a feedback on Germany. The paper provides a short overview over the basic model. The modelling approach and estimation results for the trade submodels are presented in some detail and simmulation results for the feedback effects are also included.

Keywords: Macroeconometric modelling; international spillovers; trade feedback; VEC modelling (search for similar items in EconPapers)
JEL-codes: E27 F15 F17 (search for similar items in EconPapers)
Date: 2000
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/24382/1/dp0036.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:zbw:zewdip:5319

Access Statistics for this paper

More papers in ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().