relative french foreign trade performance (esp. vs germany) bdf – cepii workshop paris, 25 / 11 /...
TRANSCRIPT
Relative French foreign trade performance (esp. vs Germany)
BdF – CEPII WORKSHOP
Paris, 25 / 11 / 2009
Hervé Boulhol
Microsoft Office Word 2007.lnk
Three questions
• Q1: What do we know?
• Q2: Is it a French or a German issue?
• Q3: Export growth vs welfare?
Q1: What do we know?
1. The explanation is neither due to export destinations nor to sector specialisation
2. Offshore outsourcing to Eastern Europe has reduced production costs in Germany
3. French export performance has been particularly low in high-tech & high-quality products
4. Wage moderation has contributed to the competitiveness of German firms
5. Relative domestic demand dynamics
We know a lot
Erkell-Rousse and Sylvander (2008)
Relative export performance is explained by domestic demand (about 30%), offshore outsourcing (about 30%), world demand (10%), wages / mark-ups (25%)
Q2: A French or a German issue?
French relative exports
60
70
80
90
100
110
120
rela tive to g erma ny rela tive to E uro A rea exl. G E R
Q2: A French or a German issue?
French relative exports
60
70
80
90
100
110
120
rela tive to g erma ny
rela tive to E uro A rea exl. G E R
G E R re la tive to E uro A rea excl.F ra nce
Q3: Export growth versus welfare?
• France relative to Germany: is it an issue?
0.4
0.45
0.5
0.55
0.6
0.65
0.7
0.75
0.8
0.85
1991 1993 1995 1997 1999 2001 2003 2005 2007
GDPV Export
Q3: Export growth versus welfare?
• France rel. to Euro area (excl. GER)
0.25
0.3
0.35
0.4
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
GDPV Export
Welfare: France vs Germany
• Private consumption … AND … investment
0.4
0.45
0.5
0.55
0.6
0.65
0.7
0.75
0.8
0.85
1991 1993 1995 1997 1999 2001 2003 2005 2007
C ons o Inv E x port
France vs Germany: export and competitiveness
• Export divergence preceded
90
100
110
120
130
140
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
0 .4
0.45
0.5
0.55
0.6
0.65
C ompetitiv enes s E x port
Labour share (compensation of employees as % of GDP)
• Unsustainable wage moderation in Germany?
0.46
0.48
0.5
0.52
0.54
0.56
1991 1993 1995 1997 1999 2001 2003 2005 2007
F R A G E R
Bazaar effect?
• 1. Labour market rigidities• 2. Distorted specialisation towards capital goods• 3. Outsourcing of labour intensive jobs + rise in
unemployment• 4. Symptomatic export growth with sluggish demand Some interesting components, but many problems incl.:• A. Labour market rigidites in France as well explain
poor export performance (IMF)• B. Bazaar effect is an equilibrium sequence whereas
high trade surplus points to real exchange rate undervaluation, which suggests that wage moderation + sluggish demand is the result of disequilibrium
Bonus: Real GDP and Welfareaccumulation abroad: from GDP to GNP
• Net primary incomes from the rest of the world (% of GDP)
-1.5
-1
-0.5
0
0.5
1
1.5
2
2.5
2000 2001 2002 2003 2004 2005 2006 2007 2008
F R A G E R
Bonus
• From 2000 to 2008, real GNP grew in Germany relative to France 0.4% faster per year on average than real GDP
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