Euro Area and World Demand

Transitive Relation?

1. Germany GDP is one third of the Euro Area GDP
2. German exporters account for the robust growth of the German economy (ft.com)
3. Will the Euro Area slow down after the sharp reduction of the US demand and the high value of the euro?

Is there any similarity with the US downturn in 2001? If so

• could history have helped in predicting pass-through from the US?
• is the US likely to mantain its driving force in the future? For instance, see recent comments on the overtaking of the euro (J. Frankel, P. Krugman, Bordo and James)