Has the Impact of Key Determinants of German Exports Changed?

The question as to whether changes in the external environment may have caused the importance of key determinants of German exports to shift since the 1990s is addressed by estimating Germany’s exports to EMU partner countries (intra exports) and to countries outside the euro area (extra exports). Analytically, this is done first by estimating error correction models across different samples. Second, it is tested whether the long-run export behaviour of intra and extra exports has changed since the 1990s. As an initial and tentative result, the impact of price competitiveness on both intra and extra exports appears to have decreased. Finally, simulations are conducted to reconstruct the adjustment process of both intra and extra exports following demand and price shocks.