Evaluation of the Impact of Consumption, Investment and Export on Import - Data From German Economy

Abstract

Abstract:German import represents 5.6% of total global imports and this establishes Germany as the third largest importer in the world. This study examines the dependence of imports on consumption, investment and exports in Germany, using time series data for the period 1997-2013. We received an error correction model that involved short-term and long-term effects and seasonal components. Based on the estimated model, with 1% increase in investment or exports the short-term effect would result in an increase in imports by 0.39% and 0.58%, respectively. We determined the period for which there would be a balance of imports in case of shock on independent variables. There is also a slight constant change in imports during different seasons and a general reduction of import growth by 5.59% on average.