Measuring Competitiveness

Author/Editor:

J. Peter Neary

Publication Date:

September 1, 2006

Electronic Access:

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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 reviews alternative approaches to measuring an economy's cost competitiveness and proposes some new measures inspired by the economic theory of index numbers. The indices provide a theoretical benchmark for estimated real effective exchange rates, but differ from standard measures in that they are based on marginal rather than average sectoral shares in GDP or employment. The use of the new indices is illustrated by some simple calculations that highlight the potential exposure of the Irish economy to fluctuations in the euro-sterling exchange rate.

Series:

Working Paper No. 2006/209

Subject:

Competition Consumer price indexes Cost of living Employment Real effective exchange rates

English

Publication Date:

September 1, 2006

ISBN/ISSN:

9781451864694/1018-5941

Stock No:

WPIEA2006209

Pages:

21

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