An update of the Bank of Italy methodology underlying the estimation of price-competitiveness misalignments
Claire Giordano ()
No 556, Questioni di Economia e Finanza (Occasional Papers) from Bank of Italy, Economic Research and International Relations Area
This paper documents the recent innovations to the Bank of Italy methodology underlying the estimation of price-competitiveness misalignments , first put forward in Giordano (2018); it also provides the most recent misalignment estimates for the euro area and for its four main economies, based on five alternatively deflated indicators. The extension of the sample period, the recalibration of the trade weights employed and the significant data revisions and refinements introduced have not qualitatively modified the assessment of misalignments since 1999 for the afore-mentioned economies, although point estimates have changed non-negligibly. In the first half of 2019, no significant price competitiveness misalignment is recorded for Italy and for the euro area as a whole, whereas for France, Germany and Spain there is still evidence of a modest undervaluation.
Keywords: price competitiveness; real effective exchange rate; equilibrium exchange rate; external imbalances (search for similar items in EconPapers)
JEL-codes: E31 F00 F31 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eec, nep-mac and nep-opm
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Persistent link: https://EconPapers.repec.org/RePEc:bdi:opques:qef_556_20
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