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Dive into the research topics where Christian Dreger is active.

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Featured researches published by Christian Dreger.


Energy Economics | 2011

Energy Consumption and Economic Growth - New Insights into the Cointegration Relationship

Ansgar Belke; Frauke Dobnik; Christian Dreger

This paper examines the long-run relationship between energy consumption and real GDP, including energy prices, for 25 OECD countries from 1981 to 2007. The distinction between common factors and idiosyncratic components using principal component analysis allows to distinguish between developments on an international and a national level as drivers of the long-run relationship. Indeed, cointegration between the common components of the underlying variables indicates that international developments dominate the long-run relationship between energy consumption and real GDP. Furthermore, the results suggest that energy consumption is price-inelastic. Causality tests indicate the presence of a bi-directional causal relationship between energy consumption and economic growth.


Eastern European Economics | 2007

Long-Run Money Demand in the New EU Member States with Exchange Rate Effects

Christian Dreger; Hans-Eggert Reimers

Within a wide range of other economic and financial indicators, money is highly relevant to the two-pillar monetary strategy of the European Central Bank for detecting risks to price stability over the medium term. Money demand models are a natural benchmark for assessing monetary developments. The existence of a well-specified and stable relation between money and prices can be perceived as a prerequisite for using monetary aggregates in the conduct of monetary policy, which is usually assessed within a money-demand framework. In this respect, the present analysis is important for the new member states of the European Union, as they are expected to join the euro area in future years. In this study, a money-demand analysis in the new member states is conducted using panel cointegration methods. A well-behaved long-run money demand relation can be identified only if the exchange rate is included as part of the opportunity cost. In the long-run cointegrating vector, income elasticity exceeds unity. Over the entire sample period, the exchange rate vis-à-vis the U.S. dollar turns out to be significant and a more appropriate variable in money demand than is the euro exchange rate.


Review of International Economics | 2013

Current Account Imbalances in the Euro Area: Does Catching Up Explain the Development?

Ansgar Belke; Christian Dreger

In the debate on global imbalances, the euro area countries received increasing attention since the outbreak of the financial crisis. While the current account is on balance for the entire area, divergences between individual member states have increased since the introduction of the common currency and are part of the excessive imbalances procedure. This paper explores the determinants of the imbalances by using panel-econometric techniques. The analysis shows that a lack in competitiveness is the main explanation for the external deficits of the countries that are at the heart of the euro area debt crisis. As a deterioration of competitiveness is not feasible for the surplus countries, an asymmetric response is required to reduce the imbalances.


Urban Policy and Research | 2013

Is there a Bubble in the Chinese Housing Market

Christian Dreger; Yanqun Zhang

For many analysts, the Chinese economy is being spurred on by a bubble in the housing market, probably driven by the fiscal stimulus package and massive credit expansion, with potentially adverse effects on the real economy. The house price development is investigated by panel cointegration techniques. Evidence is based on a data-set for 35 major cities. Cointegration is detected between real house prices and a set of macroeconomic determinants. The results indicate that the bubble is less than 15 per cent of the equilibrium value implied by the fundamentals at the end of 2010. The bubble is particularly huge in the cities in the south-east coastal areas and special economic zones. While the spillovers from real house prices to consumer price index (CPI) inflation are significant at the margin, gross domestic product (GDP) growth may not be heavily affected. Thus, a decline of the bubble will likely have only modest effects on the real economy.


Annual Conference 2011 (Frankfurt, Main): The Order of the World Economy - Lessons from the Crisis | 2011

Current account imbalances in the euro area: Catching up or competitiveness?

Ansgar Belke; Christian Dreger

In the debate on global imbalances, the euro area countries did not receive much attention so far. While the current account is on balance for the entire area, divergences between individual member states have increased since the introduction of the common currency. In this paper, the imbalances are traced to catching up and competitiveness factors using paneleconometric techniques. In line with the intertemporal approach to the current account, low income countries tend to run deficits, while rich countries realize surpluses. However, the effect diminishes, if early years are dropped from the sample. The competitiveness channel is more robust and shows the expected sign, i.e. a real appreciation leads to external deficits. To restore competitiveness, a reduction of unit labour costs is on the agenda. Since a deterioration of competitiveness is not a feasible strategy for the surplus countries, an asymmetric response across countries is required in order to reduce the imbalances.


Empirical Economics | 2013

A Further Examination of the Export-Led Growth Hypothesis

Christian Dreger; Dierk Herzer

This article challenges the common view that exports generally contribute more to GDP growth than a pure change in export volume, as the export-led growth hypothesis predicts. Applying panel cointegration techniques to a production function with non-export GDP as the dependent variable, we find for a sample of 45 developing countries that: (i) exports have a positive short-run effect on non-export GDP and vice versa (short-run bidirectional causality), (ii) the long-run effect of exports on non-export output, however, is negative on average, but (iii) there are large differences in the long-run effect of exports on non-export GDP across countries. Cross-sectional regressions indicate that these cross-country differences in the long-run effect of exports on non-export GDP are significantly negatively related to cross-country differences in primary export dependence and business and labor market regulation. In contrast, there is no significant association between the growth effect of exports and the capacity of a country to absorb new knowledge.


Empirica | 2009

Money velocity and asset prices in the euro area

Christian Dreger; Juergen Wolters

Monetary growth in the euro area has exceeded its target since several years. At the same time, the money demand function seems to be increasingly unstable if more recent data are used. If the link between money balances and the macroeconomy is fragile, the rationale of monetary aggregates in the ECB strategy has to be doubted. In fact, a rise in the income elasticity after 2001 can be observed, and may reflect the exclusion of real and financial wealth in conventional specifications of money demand. This presumption is explored by means of a cointegration analysis. To separate income from wealth effects, the specification in terms of money velocity is preferred. Evidence for the presence of wealth in the long run relationship is provided. In particular, both stock and house prices have exerted a negative impact on velocity after 2001 and lead to almost identical equilibrium errors. The extended error correction model is stable over the entire sample period and survive a battery of specification tests.


International Journal of Forecasting | 2014

Money demand and the role of monetary indicators in forecasting euro area inflation

Christian Dreger; Juergen Wolters

This paper examines the forecasting performance of a broad monetary aggregate (M3) in predicting euro area inflation. Excess liquidity is measured as the difference between the actual money stock and its fundamental value, the latter determined by a money demand function. The out-of sample forecasting performance is compared to widely used alternatives, such as the term structure of interest rates. The results indicate that the evolution of M3 is still in line with money demand even in the period of the financial and economic crisis. Monetary indicators are useful to predict inflation at the longer horizons, especially if the forecasting equations are based on measures of excess liquidity. Due to the stable link between money and inflation, central banks should implement exit strategies from the current policy path, as soon as the financial conditions are expected to return to normality.


Kyklos | 2007

Wage Flexibility and Labour Market Institutions: A Meta-Analysis

Miquel Clar; Christian Dreger; Raul Ramos

Evidence during the nineties about the response of real wages to shocks highlights that this response is substantially lower in European countries than in the United States and that there are important differences among European countries. Which are the reasons that explain these different reactions? In this paper, we apply meta-analytical techniques in order to provide a quantitative summary of the available evidence regarding the influence of labour market institutions on real wage flexibility. We find that the design of the study affects the obtained results, and that in more deregulated labour markets with a lower presence of trade unions, this response is particularly larger.


Journal of Macroeconomics | 2013

Does Euro Area Membership Affect the Relation between GDP Growth and Public Debt

Christian Dreger; Hans-Eggert Reimers

We analyse the relationship between the debt to GDP ratio and real per capita GDP growth for the euro area members by distinguishing between periods of sustainable and non-sustainable debt. Thresholds are theory-based and depend on the macroeconomic framework. If the interest rate exceeds nominal output growth, primary budget surpluses are required to achieve a sustainable debt ratio. The negative impact of the debt to GDP ratio is particularly strong for non sustainable ratios and especially relevant for the euro area. This suggests that the participation in monetary union might entail an additional risk for its members.

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Dive into the Christian Dreger's collaboration.

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Malte Rieth

German Institute for Economic Research

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Hella Engerer

German Institute for Economic Research

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Ansgar Belke

University of Duisburg-Essen

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Konstantin A. Kholodilin

German Institute for Economic Research

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Simon Junker

German Institute for Economic Research

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Kristina van Deuverden

Halle Institute for Economic Research

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Claus Michelsen

German Institute for Economic Research

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