Measuring Competitiveness: Trade in Goods or Tasks?
AbstractWith global supply chains, any value added or production task can be traded as part of goods. This means that competitiveness can be measured either in terms of â€œtasksâ€ (Bems and Johnson, 2012), or goods, but with goods prices reflecting the cost of tasks embedded in those goods. We show that when measuring competitiveness in goods, the formula used in computing the real effective exchange rates at the IMF (Bayoumi, Lee, and Jayanthi, 2005) needs to be expressed in terms of the price of value added and needs an additional term, which captures a gain or loss in competitiveness of goods due to outsourcing.
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Bibliographic InfoPaper provided by International Monetary Fund in its series IMF Working Papers with number 13/100.
Date of creation: 08 May 2013
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-09-26 (All new papers)
- NEP-CSE-2013-09-26 (Economics of Strategic Management)
- NEP-CWA-2013-09-26 (Central & Western Asia)
- NEP-INT-2013-09-26 (International Trade)
- NEP-OPM-2013-09-26 (Open Economy Macroeconomic)
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IMF Working Papers
04/22, International Monetary Fund.
- Mika Saito, 2004. "Armington elasticities in intermediate inputs trade: a problem in using multilateral trade data," Canadian Journal of Economics, Canadian Economics Association, vol. 37(4), pages 1097-1117, November.
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