Arbeitspapier

A re-assessment of German import demand

Empirical studies analysing German import demand functions traditionally report implausibly high income and relativly low price elasticities. Furthermore, estimation results strongly depend on the observation period. Minor variations in the estimation period typically lead to insignificant price terms often displaying the wrong sign. Based on an extensive econometric analysis, the author shows that these problems are caused by the use of highly aggregated activity variables (GDP or total demand). The problem is easily solved if GDP components, namely exports and investment, are used to model domestic economic activity. We find that imports, exports, investment, and a relative import price form highly stable cointegration relationships. The corresponding activity elasticity is clearly below 1 and the price elasticity is highly significant. Changes in the estimation period neither change the impact nor the significance of the determinants of imports.

Sprache
Englisch

Erschienen in
Series: IMK Working Paper ; No. 8/2007

Klassifikation
Wirtschaft
Single Equation Models; Single Variables: Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
Model Evaluation, Validation, and Selection
Trade: Forecasting and Simulation
Thema
German import demand equation
price elasticity
income elasticity
activity elasticity
aggregation problems
error correction model

Ereignis
Geistige Schöpfung
(wer)
Stephan, Sabine
Ereignis
Veröffentlichung
(wer)
Hans-Böckler-Stiftung, Institut für Makroökonomie und Konjunkturforschung (IMK)
(wo)
Düsseldorf
(wann)
2007

Handle
URN
urn:nbn:de:101:1-2008081877
Letzte Aktualisierung
10.03.2025, 11:43 MEZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
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Objekttyp

  • Arbeitspapier

Beteiligte

  • Stephan, Sabine
  • Hans-Böckler-Stiftung, Institut für Makroökonomie und Konjunkturforschung (IMK)

Entstanden

  • 2007

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