AbstractThis paper reviews alternative approaches to measuring an economy's cost competitiveness and proposes some new measures derived from 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 which highlight the potential exposure of the Irish economy to fluctuations in the euro-sterling exchange rate.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by School Of Economics, University College Dublin in its series Working Papers with number 200521.
Length: 18 pages
Date of creation: 11 Nov 2005
Date of revision:
competitiveness; economic theory of index numbers; European Monetary Union (EMU); real effective exchange rates (REERs);
Other versions of this item:
- F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General
- C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Lane, Philip R., 1999.
"The New Open Economy Macroeconomics: a Survey,"
CEPR Discussion Papers
2115, C.E.P.R. Discussion Papers.
- Patrick Honohan & Brendan Walsh, 2002.
"Catching Up with the Leaders: The Irish Hare,"
Brookings Papers on Economic Activity,
Economic Studies Program, The Brookings Institution, vol. 33(1), pages 1-78.
- Honohan, Patrick & Walsh, Brendan M., 2002. "Catching up with the leaders : the Irish hare," Open Access publications from University College Dublin urn:hdl:10197/1596, University College Dublin.
- J. Peter Neary, 2003.
"Competitive versus Comparative Advantage,"
The World Economy,
Wiley Blackwell, vol. 26(4), pages 457-470, 04.
- Wendy Carlin & Andrew Glyn & John Van Reenen, 1999.
"Export Market Performance of OECD countries: an empirical examination of the role of cost competitiveness,"
IFS Working Papers
W99/22, Institute for Fiscal Studies.
- Carlin, Wendy & Glyn, Andrew & Van Reenen, John, 2001. "Export Market Performance of OECD Countries: An Empirical Examination of the Role of Cost Competitiveness," Economic Journal, Royal Economic Society, vol. 111(468), pages 128-62, January.
- Anderson, James E. & Neary, J. Peter, 1992.
"A new approach to evaluating trade policy,"
Policy Research Working Paper Series
1022, The World Bank.
- Bayoumi, Tamim & Jayanthi, Sarma & Lee, Jaewoo, 2006.
"New Rates from New Weights,"
CEPR Discussion Papers
5860, C.E.P.R. Discussion Papers.
- Obstfeld, Maurice & Rogoff, Kenneth, 1995.
"Exchange Rate Dynamics Redux,"
Journal of Political Economy,
University of Chicago Press, vol. 103(3), pages 624-60, June.
- Maurice Obstfeld and Kenneth Rogoff., 1995. "Exchange Rate Dynamics Redux," Center for International and Development Economics Research (CIDER) Working Papers C95-048, University of California at Berkeley.
- Maurice Obstfeld & Kenneth Rogoff, 1996. "Exchange Rate Dynamics Redux," NBER Working Papers 4693, National Bureau of Economic Research, Inc.
- Obstfeld, Maurice & Rogoff, Kenneth, 1995. "Exchange Rate Dynamics Redux," CEPR Discussion Papers 1131, C.E.P.R. Discussion Papers.
- Baker, Terence J. & FitzGerald, John & Honohan, Patrick, 1996. "Economic Implications for Ireland of EMU," Research Series, Economic and Social Research Institute (ESRI), number PRS28.
- Barry, F, 1997. "Dangers for Ireland of and EMU without the UK : Some Calibration Results," Papers 97/20, College Dublin, Department of Political Economy-.
- Menzie D. Chinn, 2005.
"A Primer on Real Effective Exchange Rates: Determinants, Overvaluation, Trade Flows and Competitive Devaluation,"
NBER Working Papers
11521, National Bureau of Economic Research, Inc.
- Menzie Chinn, 2006. "A Primer on Real Effective Exchange Rates: Determinants, Overvaluation, Trade Flows and Competitive Devaluation," Open Economies Review, Springer, vol. 17(1), pages 115-143, January.
- Ian Marsh & Stephen Tokarick, 1996. "An assessment of three measures of competitiveness," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 132(4), pages 700-722, December.
- Neary, J Peter, 1987.
"Determinants of the Equilibrium Real Exchange Rate,"
CEPR Discussion Papers
209, C.E.P.R. Discussion Papers.
- Neary, Peter, 1988. "Determinants of the Equilibrium Real Exchange Rate," American Economic Review, American Economic Association, vol. 78(1), pages 210-15, March.
- Richard W. Blundell & Martin Browning & Ian A. Crawford, 2003.
"Nonparametric Engel Curves and Revealed Preference,"
Econometric Society, vol. 71(1), pages 205-240, January.
- Richard Blundell & Martin Browning & Ian Crawford, 1997. "Non-parametric Engel curves and revealed preferences," IFS Working Papers W97/14, Institute for Fiscal Studies.
- Richard Blundell & Martin Browning & Ian Crawford, 2002. "Nonparametric Engel Curves and Revealed Preference," CAM Working Papers 2002-04, University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics.
- Richard Blundell & Martin Browning & Ian Crawford, 1998. "Nonparametric Engel Curves and Revealed Preference," Discussion Papers 99-07, University of Copenhagen. Department of Economics.
- James E. Anderson & J. Peter Neary, 2005. "Measuring the Restrictiveness of International Trade Policy," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262012200.
- Walsh, Brendan, 2000. "Cyclical and Structural Influences on Irish Unemployment," Oxford Economic Papers, Oxford University Press, vol. 52(1), pages 119-45, January.
- Valerie Cerra & Jarkko Soikkeli, 2002.
"How Competitive is Irish Manufacturing?,"
IMF Working Papers
02/160, International Monetary Fund.
- J. Peter Neary, 2004.
"Rationalizing the Penn World Table: True Multilateral Indices for International Comparisons of Real Income,"
American Economic Review,
American Economic Association, vol. 94(5), pages 1411-1428, December.
- J. Peter Neary, 1996. "Rationalising the Penn World Table - True Multilateral Indices for International Comparisons of real Income," Working Papers 199622, School Of Economics, University College Dublin.
- Neary, J Peter, 1985. "International Factor Mobility, Minimum Wage Rates, and Factor-Price Equalization: A Synthesis," The Quarterly Journal of Economics, MIT Press, vol. 100(3), pages 551-70, August.
- Cassidy, Mark & O'Brien, Derry, 2005. "Export Performance and Competitiveness of the Irish Economy," Quarterly Bulletin Articles, Central Bank of Ireland, pages 75-95, July.
- Diewert, W. E., 1976. "Exact and superlative index numbers," Journal of Econometrics, Elsevier, vol. 4(2), pages 115-145, May.
- Neary, J.P. & Thom, D.R., 1996. "Punts, Pounds and Euros: In Search of an Optimum Currency Area," Papers 96/24, College Dublin, Department of Political Economy-.
- Bogdan Lissovolik & Julio Escolano & Stefania Fabrizio & Werner Schule & Herman Z. Bennett & Stephen Tokarick & Yuan Xiao & Marialuz Moreno Badia & Eva Gutierrez & Iryna V. Ivaschenko, 2008. "Competitiveness in the Southern Euro Area: France, Greece, Italy, Portugal, and Spain," IMF Working Papers 08/112, International Monetary Fund.
- Zarnic, Ziga & Bennett, Herman, 2009.
"International competitiveness of the Mediterranean quartet: a heterogeneous-product approach,"
Open Access publications from Katholieke Universiteit Leuven
urn:hdl:123456789/296233, Katholieke Universiteit Leuven.
- Herman Z Bennett & Ziga Zarnic, 2009. "International Competitiveness of the Mediterranean Quartet: A Heterogeneous-Product Approach," IMF Staff Papers, Palgrave Macmillan, vol. 56(4), pages 919-957, November.
- Herman Z. Bennett & Ziga Zarnic, 2008. "International Competitiveness of the Mediterranean Quartet:A Heterogeneous-Product Approach," IMF Working Papers 08/240, International Monetary Fund.
- Cheptea, A. & Fontagné, L. & Zignago, S., 2012.
"European Export Performance,"
393, Banque de France.
- Jules Leichter & Cristina Mocci & Stefania Pozzuoli, . "Measuring External Competitiveness:An Overview," Working Papers 2, Department of the Treasury, Ministry of the Economy and of Finance.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Nicolas Clifton).
If references are entirely missing, you can add them using this form.