Euro Area Export Performance and Competitiveness
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Summary:
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.
Series:
Working Paper No. 2011/140
Subject:
Competition Consumer price indexes Exchange rates Exports Financial markets Foreign exchange International trade Prices Real effective exchange rates
English
Publication Date:
June 1, 2011
ISBN/ISSN:
9781455265459/1018-5941
Stock No:
WPIEA2011140
Pages:
16
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