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Euro Area Export Performance and Competitiveness

Jarkko Turunen (), Richard T. Harmsen and Tamim Bayoumi

No 11/140, IMF Working Papers from International Monetary Fund

Abstract: 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.

Keywords: Economic models; Euro Area; Export performance; Export growth; Export competitiveness; Exports; Demand; Cross country analysis; Real effective exchange rates; Price elasticity; Foreign exchange; Competitiveness, Trade equations, euro, export, reer, exchange rates, Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook: General, Country and Industry Studies of Trade, (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-eec, nep-int and nep-opm
Date: 2011-06-01
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