Demand Patterns in France, Germany, and Belgium : Can We Explain the Differences?

Author/Editor:

Igor Lebrun ; Esther Perez Ruiz

Publication Date:

September 12, 2014

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

The need to revive Euro area growth highlights the importance of the evolution of domestic and external demand in the core. This paper puts recent demand patterns in France, Germany, and Belgium into historical perspective. We find that, first, dynamics for private consumption, non-residential business investment, and exports since 2008 is dominated by conventional determinants, with no discernible structural break as a result of the crisis. Second, although country-specific factors matter in some cases, demand patterns in these countries are largely driven by common determinants. Third, developments in common fundamentals tend to dominate demand dynamics, coupled, in a few cases, with structurally different elasticities across countries. Fourth, short-term analysis suggests a role for confidence and uncertainty factors in explaining temporary deviations of these variables from long-term fundamentals.

Series:

Working Paper No. 14/165

Subject:

English

Publication Date:

September 12, 2014

ISBN/ISSN:

9781498309462/1018-5941

Stock No:

WPIEA2014165

Price:

$18.00 (Academic Rate:$18.00)

Format:

Paper

Pages:

25

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