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The Competitiveness Challenge: EU Member States in International Trade

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Abstract

Given the increasing internationalization of trade, it is imperative for any country to ensure that its economy remains competitive. This study sheds light on trends in competitiveness in the EU Member States as made evident in an analysis of various indicators. Having lost their exchange rate autonomy by adopting the euro, the euro area countries face an additional constraint on national economic policy-making in the pursuit of competitiveness. In recent years, diverging unit labor cost developments have left their mark on competitiveness trends in individual euro area countries. Changes in competitiveness should not be interpreted in isolation, but rather against the background of a country’s level of economic development, as evidenced in particular by the EU Member States in Central, Eastern and Southeastern Europe. For instance, long-term catching-up processes and equilibrium price adjustments have a major impact on price competitiveness indicators. The countries of this region managed to tap their potential for catching up and succeeded in withstanding international competition especially by raising product quality.

Suggested Citation

  • Antje Hildebrandt & Maria Antoinette Silgoner, 2007. "The Competitiveness Challenge: EU Member States in International Trade," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue 4, pages 67-88.
    • Handle: RePEc:onb:oenbmp:y:2007:i:4:b:4
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    References listed on IDEAS

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    1. Ca' Zorzi, Michele & Schnatz, Bernd, 2007. "Explaining and forecasting euro area exports: which competitiveness indicator performs best?," Working Paper Series 833, European Central Bank.
    2. Thimann, Christian & Buldorini, Luca & Makrydakis, Stelios, 2002. "The effective exchange rates of the euro," Occasional Paper Series 2, European Central Bank.
    3. Sebastian Dullien & Ulrich Fritsche, 2007. "Anhaltende Divergenz der Lohnstückkostenentwicklung im Euroraum problematisch," DIW Wochenbericht, DIW Berlin, German Institute for Economic Research, vol. 74(22), pages 349-357.
    4. Luca Buldorini & Stelios Makrydakis & Christian Thimann, 2002. "The effective exchange rates of the euro," Occasional Paper Series 02, European Central Bank.
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    Cited by:

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    3. Christoph Böhringer & Victoria Alexeeva-Talebi, 2011. "Unilateral climate policy and competitiveness: The implications of differential emission pricing," Working Papers V-338-11, University of Oldenburg, Department of Economics, revised Jun 2011.
    4. Viera Pavličková, 2013. "The Competitiveness Of Slovak Foreign Trade In The European Market," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 58(196), pages 7-50, January –.

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    JEL classification:

    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
    • F15 - International Economics - - Trade - - - Economic Integration
    • P20 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - General

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