Euro Area Export Performance and Competitiveness

Jarkko Turunen, Richard Harmsen and Tamim Bayoumi

No 2011/140, IMF Working Papers from International Monetary Fund

Abstract: Concerns about export growth within the euro area peripheral countries due to a lack of competitiveness within the euro area are a key policy issue. Our analysis suggests that: (i) Long-term price elasticities for intra-euro area exports are at least double those for extra-euro area exports, so traditional real effective exchange rate indexes may overstate the effectiveness of euro depreciation in restoring exports growth in the euro area periphery and; (ii) There are surprisingly wide divergences across alternative relative price measures and even when relative price data suggest a steady loss in intra- (and extra-) euro area competitiveness, the pace of deterioration depends on the measure of relative prices used.

Keywords: WP; euro; CPI; exchange rate; export; Exports; Competitiveness; Trade equations; Euro area; export equation; area trade; PPI datum; CPI price series; area export; export volume; Real effective exchange rates; Competition; Exchange rates; Consumer price indexes (search for similar items in EconPapers)
Pages: 16
Date: 2011-06-01
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Citations: View citations in EconPapers (82)

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