The Impact of Exchange Rates on German Exports – Simulations with Error Correction Models

Since mid-2014 the euro has depreciated both nominally and in real effective terms. An analysis of the elasticities of goods and total exports to changes in various exchange rates shows that elasticity with regard to exchange rates ranges between -0.2 and -0.6 percentage points. Thanks to the euro’s depreciation in the first quarter, German exports will receive a stimulus of 0.8 to 1.0 percentage points this year and of 0.5 to 0.6 percentage points in the year ahead.