COMMERCE DEPARTMENT SCENARIOS WEST GERMAN GROWTH, 1986-1990 AUGUST 5, 1986

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP02-06156R000101360001-2
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 2
• Document Creation Date: December 22, 2016
• Document Release Date: May 25, 2012
• Sequence Number: 1
• Publication Date: August 5, 1986
• Content Type: MEMO

Declassified in Part - Sanitized Copy Approved for Release 2012/05/25: CIA-RDP02-061568000101360001-2
6 August 1986
MEMORANDUM FOR THE RECORD
at repared the attached memorandum
equest o the Office of Intelligence Liaison
at Commerce. It answered questions raised by Deputy Assistant Secretary
Frank Vargo in connection with an ar
Secretary Baldridge. drafting for
and grateful for the a ort, argo was very pleased
Distribution:
Original - AC/WE
1 - ADC/WE
1 - wr, unrono
1 - GN Production
ief, WE/GN
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Declassified in Part - Sanitized Copy Approved for Release 2012/05/25: CIA-RDP02-061568000101360001-2
 Declassified in Part -Sanitized Copy Approved for Release 2012/05/25 :CIA-RDP02-061568000101360001-2?5X1
Commerce Department Scenarios
West German Growth, 1986-1980
August 5, 1986
I. Effect of West German Growth on the EC
West German real GNP growth has a significant impact on other West European economies
due to trade linkages. Simulations of our econometric model indicate eons-quarter
percentage point Increase in EC growth for every one-half percentage point increase in
West German growth. We estimate that EC growth would reach 3.0 percent, based on
current projections for non-European countries, if the West German growth rate were to
reach 3.75 percent.
Increase in West German growth
(relative to baseline 2.5%)
+0.5 pp
+1.0 pp
+1,5 pp
+2.0 pp
Increase in EC Growth
-- excluding West Germany
+0,2 pp
+0,4 pp
+0,7 pp
+0.9 pp
(relative to baseline 2.4%)
pp -percentage points
II. Scope for Stronger West German Growth
Real GNP in West Germany (s significantly below its potential level, based on
extrapolations of factor input growth since 1979, the country's last cyclical peak. Our
econometric model estimates a shortfall between actual and potential GNP of 10-12
percent, as of last year. As a result, we believe that West German growth could exceed
the 2.5 percent level by one or perhaps two percentage points for the remainder of the
decade without incurring supply-side bottlenecks or significant domestically-generated
inflation.
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Declassified in Part -Sanitized Copy Approved for Release 2012/05/25 :CIA-RDP02-061568000101360001-2