The impact of issuing Euro on Germany's Economic Growth in 2002
Table of Contents
Introduction3
Significance of the Study3
Background of the Study3
Research Question4
Hypothesis4
Variables4
Literature Review5
Expenses of the Government5
Exports of goods and services6
Final consumption expenditure7
Gross capital formation and domestic savings8
Methodology8
Data Collection8
Method8
Econometric Model9
Data Analysis10
Conclusion13
Introduction
Significance of the Study
The study is related to “the impact of issuing Euro on the economic growth of Germany in 2002.” In relation to this, it is important and imperative to note that economic growth is a means to reach the goals which are set by the country in its monetary and fiscal policies. Furthermore, economic growth is not a goal. Unfortunately, it sounds as if often economic growth is a goal in itself. The consequences of allowing economic growth as a goal and to measure it by GDP growth is that countries like Germany do not know for sure if the economic activities in the country aimed at the goals that the country really have. It may be that they directly counteract the goals as welfare and for the sustainable development etc.
Background of the Study
The study which relates to issuing Euro on the economic growth of Germany in 2002, it can be said that the growth in an economy is a factor that makes the country above in comparison with the other countries. There are various factors of increasing growth of an economy and the less issuing of currency is one of them. In addition to this, the country who issues currency in larger amounts faces devaluation in its currency and therefore impact the growth in a downward direction. Moreover, this is something which happened with Germany in 2002 which poses certain exhausting pressures in the economy of Germany. Furthermore, the currency notes started to issue in such a large amount in order to complete the government expenditures which results in the decreases of Germany growth rates.
Research Question
Is there an impact of issuing Euro on the economic growth of Germany in 2002?
Hypothesis
HO: There is a significant positive impact of issuing Euro on the economic growth of Germany in 2002.
HA: There is no significant positive impact of issuing Euro on the economic growth of Germany in 2002.
Variables
Dependent Variable
The dependent variable that is included in the study is growth rates of GDP.
Independent Variables
The independent variables that are included in the study include the following:
Gross domestic savings;
Gross capital formation;
Final consumption expenditure;
Exports of goods and services;
Expenses of the German Government.
Literature Review
The macroeconomic factors like trade and gross domestic savings is no doubt the key determinants of a country's economic growth but aside with them, one other factor which has a major share in the economic growth is the rate of exchange of the particular country. It certainly plays a significant role in the trading factor i.e. imports and exports that can gather intensive revenues for an economy. The trade being an important share shows the importance of this variable not only from the government point but also from the producer's point of view as well. It has also a significant impact on the internal ...