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The structural determinants of the US competitiveness in the last decades: a "trade-revealing" analysis

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  • di Mauro, Filippo
  • Del Gatto, Massimo
  • Gruber, Joseph
  • Mandel, Benjamin

Abstract

We analyze the decline in the U.S. share of world merchandise exports against the backdrop of a model-based measure of competitiveness. We preliminarily use constant market share analysis and gravity estimations to show that the majority of the decline in export shares can be associated with a declining share of world income, suggesting that the dismal performance of the U.S. market share is not a sufficient statistic for competitiveness. We then derive a computable measure of country-sector specific real marginal costs (i.e. competitiveness) which, insofar it is inferred from actual trade ows, is referred to as 'revealed'. Brought to the data, this measure reveals that most U.S. manufacturing industries are losing momentum relative to their main competitors, as we find U.S. revealed marginal costs to grow by more than 38% on average. At the sectoral level, the "Machinery" industry is the most critical. JEL Classification: F12, F17, F19

Suggested Citation

  • di Mauro, Filippo & Del Gatto, Massimo & Gruber, Joseph & Mandel, Benjamin, 2012. "The structural determinants of the US competitiveness in the last decades: a "trade-revealing" analysis," Working Paper Series 1443, European Central Bank.
  • Handle: RePEc:ecb:ecbwps:20121443
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    File URL: https://www.ecb.europa.eu/pub/pdf/scpwps/ecbwp1443.pdf
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    References listed on IDEAS

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    1. Massimo Del Gatto & Giordano Mion & Gianmarco I.P. Ottaviano, 2006. "Trade Integration, Firm Selection and the Costs of Non-Europe," Development Working Papers 218, Centro Studi Luca d'Agliano, University of Milano.
    2. Harald Fadinger & Pablo Fleiss, 2011. "Trade and Sectoral Productivity," Economic Journal, Royal Economic Society, vol. 121(555), pages 958-989, September.
    3. Gregory Corcos & Massimo Del Gatto & Giordano Mion & Gianmarco I.P. Ottaviano, 2012. "Productivity and Firm Selection: Quantifying the ‘New’ Gains from Trade," Economic Journal, Royal Economic Society, vol. 122(561), pages 754-798, June.
    4. Robert C. Feenstra & Robert E. Lipsey & Haiyan Deng & Alyson C. Ma & Hengyong Mo, 2005. "World Trade Flows: 1962-2000," NBER Working Papers 11040, National Bureau of Economic Research, Inc.
    5. Dennis Novy, 2013. "Gravity Redux: Measuring International Trade Costs With Panel Data," Economic Inquiry, Western Economic Association International, vol. 51(1), pages 101-121, January.
    6. Massimo Del Gatto & Filippo di Mauro & Joseph W. Gruber & Benjamin R. Mandel, 2011. "The revealed competitiveness of U.S. exports," International Finance Discussion Papers 1026, Board of Governors of the Federal Reserve System (U.S.).
    7. Patrizio Pagano & Massimo Sbracia & Andrea Finicelli, 2008. "Trade-revealed TFP," 2008 Meeting Papers 717, Society for Economic Dynamics.
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    Cited by:

    1. Bernard M. Hoekman, 2013. "Global Governance of International Competitiveness Spillovers," RSCAS Working Papers 2013/33, European University Institute.

    More about this item

    Keywords

    competitiveness; export shares; firm heterogeneity; firm selection; Gravity Equation; marginal costs; productivity; Trade Costs;

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
    • F19 - International Economics - - Trade - - - Other

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