IMF Working Papers

Real Exchange Rates and Competitiveness: A Clarification of Concepts, and Some Measurements for Europe

By Leslie Lipschitz, Donogh McDonald

March 1, 1991

Preview Citation

Format: Chicago

Leslie Lipschitz, and Donogh McDonald. Real Exchange Rates and Competitiveness: A Clarification of Concepts, and Some Measurements for Europe, (USA: International Monetary Fund, 1991) accessed November 21, 2024
Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper examines indicators of competitiveness. It analyzes the conceptual foundations of conventional measures of the real exchange rate and finds that inferences about competitiveness from these indicators require strong, and in many cases implausible, assumptions. Based on this analysis some alternative measures are proposed and their use is illustrated using data from Europe. Given the usefulness of standardized indicators, four simple charts are proposed; these help solve some conundrums in the European data and provide the basis for a richer set of inferences about competitiveness.

Subject: Competition, Economic sectors, Financial markets, Labor, Labor costs, Manufacturing, Production, Productivity

Keywords: Average product, Capital productivity rise, Capital-augmenting productivity improvement, Competition, Competitiveness indicator, Cost competitiveness, Europe, Exchange rate, Goods output, Labor costs, Manufacturing, Productivity, Productivity development, Rate of return, Real exchange rate, Sector vis-à-vis, Traded goods sector, Traded-goods sector, WP

Publication Details

  • Pages:

    48

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 1991/025

  • Stock No:

    WPIEA0251991

  • ISBN:

    9781451844184

  • ISSN:

    1018-5941

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