Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/198903 
Year of Publication: 
2019
Series/Report no.: 
CESifo Working Paper No. 7543
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
We estimate a three-region (DE-REA-RoW) structural macroeconomic model, and we provide a counterfactual on how nominal exchange rate flexibility would have affected the German trade balance (TB) by simulating the shocks of the estimated model under a counterfactual flexible exchange rate regime. The actual and counterfactual TB trajectories are similar overall. Results suggest an around 2 pp lower trade surplus during 2012-15 together with a stronger real effective exchange rate in the counterfactual. The latter shows a similar upward trend in the TB, however, and the 2012-15 gap between actual and counterfactual closes at the end of the sample.
Subjects: 
Germany
euro
exchange rate
trade balance
JEL: 
E44
E52
E53
F41
Document Type: 
Working Paper
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