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

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  • Mr. Igor Lebrun
  • Mrs. Esther Perez Ruiz

Abstract

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.

Suggested Citation

  • Mr. Igor Lebrun & Mrs. Esther Perez Ruiz, 2014. "Demand Patterns in France, Germany, and Belgium: Can We Explain the Differences?," IMF Working Papers 2014/165, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2014/165
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    1. repec:nbb:ecrart:y:2014:m:december:i:iii:p:55-68 is not listed on IDEAS
    2. International Monetary Fund, 2015. "France: Staff Report for the 2015 Article IV Consultation," IMF Staff Country Reports 2015/178, International Monetary Fund.
    3. Heinze, Henriette, 2018. "The determinants of German exports: An analysis of intra- and extra-EMU trade," IPE Working Papers 95/2018, Berlin School of Economics and Law, Institute for International Political Economy (IPE).

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