Journal article

Publication year: 2004

Pages: 445-470

Journal: Economic Modelling

Volume number: 21

Issue number: 3

ISSN: 0264-9993

DOI Link: https://doi.org/10.1016/S0264-9993(03)00040-3

Publisher: Elsevier

Abstract: 

The huge demand shock caused by German unification in 1990 resulted in a remarkable increase of imports from the main trading partners of West Germany. For the purpose of modeling such effects on international trade and the feedback on the domestic economy, a macroeconometric disequilibrium model for the German economy is extended by submodels for bilateral trade flows vis-a-vis the major trading partners of Germany. These submodels treat the trade flows as well as foreign and domestic production and capacity utilization as endogenous in a vector error correction framework. Consequently, the model allows for explicit modeling of spillovers, like those resulting from the demand shock of German unification. In the model, these spillovers do not only affect German trade flows, but also real variables in other countries leading to a feedback on Germany. The paper presents econometric estimates of these effects.

Harvard Citation style: Beck, M. and Winker, P. (2004) Modeling spillovers and feedback of international trade in a disequilibrium framework, Economic Modelling, 21(3), pp. 445-470. https://doi.org/10.1016/S0264-9993(03)00040-3

APA Citation style: Beck, M., & Winker, P. (2004). Modeling spillovers and feedback of international trade in a disequilibrium framework. Economic Modelling. 21(3), 445-470. https://doi.org/10.1016/S0264-9993(03)00040-3