Euro Area Export Performance and Competitiveness

17 Pages Posted: 22 Jun 2011

See all articles by Richard T. Harmsen

Richard T. Harmsen

affiliation not provided to SSRN

Jarkko Turunen

International Monetary Fund

Tamim Bayoumi

International Monetary Fund (IMF); Centre for Economic Policy Research (CEPR)

Date Written: June 2011

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.

Suggested Citation

Harmsen, Richard T. and Turunen, Jarkko and Bayoumi, Tamim, Euro Area Export Performance and Competitiveness (June 2011). IMF Working Paper No. 11/140, Available at SSRN: https://ssrn.com/abstract=1869549

Richard T. Harmsen

affiliation not provided to SSRN

No Address Available

Jarkko Turunen (Contact Author)

International Monetary Fund ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Tamim Bayoumi

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States
202-623-6333 (Phone)
202-623-4795 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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