The Question of International Competitiveness

Ciaran Driver and Paul Temple

Chapter 3 in The Unbalanced Economy, 2012, pp 54-70 from Palgrave Macmillan

Abstract: Abstract The economic constraint that has preoccupied policymakers in recent decades has been that of wage and price inflation. The policy response — structural reform of labour markets and monetary policy rules — is credited with giving rise to the ‘great moderation’, a reduced volatility of output and price inflation. The success of this approach was accepted by many until the great financial crash, though not everyone was entirely sure. As the head of the US Federal Reserve explained (Bernanke 2004): ‘if the Great Moderation was largely the result of good luck rather than a more stable economy or better policies, then we have no particular reason to expect the relatively benign economic environment of the past twenty years to continue’. Just so — looking back, good luck, including the effects of cheap imports from China and elsewhere, does seem a strong contender, but even without such retrospective vision, the great moderation needed to be questioned; success in reducing volatility and inflation was bought at the expense of a falling labour share, more severe recessions and increased inequality which implies new problems.

Keywords: Real Exchange Rate; Income Elasticity; International Competitiveness; Great Moderation; Patent Count (search for similar items in EconPapers)
Date: 2012
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-137-27179-2_3

Ordering information: This item can be ordered from
http://www.palgrave.com/9781137271792

DOI: 10.1057/9781137271792_3

Access Statistics for this chapter

More chapters in Palgrave Macmillan Books from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().