Measuring Competitiveness in a World of Global Value Chains

28 Pages Posted: 10 Dec 2018

See all articles by Tamim Bayoumi

Tamim Bayoumi

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

Maximiliano Appendino

International Monetary Fund (IMF)

Jelle Barkema

International Monetary Fund (IMF)

Diego Cerdeiro

International Monetary Fund (IMF)

Date Written: November 2018

Abstract

All common real effective exchange rate indexes assume trade is only in final goods, despite the growing presence of global supply chains. Extending effective exchange rate indexes to include such intermediate goods can imply radically different effective exchange rate weights, depending on the relative substitutability of goods in final demand and in production. Unfortunately, the effect of these shifts in weights are difficult to identify empirically because the two currencies most affected-the dollar and the renminbi-have moved closely together. As the renminbi becomes more flexible, however, it will be important to determine which assumptions are the most realistic.

Keywords: Economic integration, Global value chains, International competitiveness, Trade openness, Trade Forecasting and Simulation, Globalization: Macroeconomic Impacts

JEL Classification: F15, F17, F62

Suggested Citation

Bayoumi, Tamim and Appendino, Maximiliano and Barkema, Jelle and Cerdeiro, Diego, Measuring Competitiveness in a World of Global Value Chains (November 2018). IMF Working Paper No. 18/229. Available at SSRN: https://ssrn.com/abstract=3297650

Tamim Bayoumi (Contact Author)

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

Maximiliano Appendino

International Monetary Fund (IMF) ( email )

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

Jelle Barkema

International Monetary Fund (IMF) ( email )

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

Diego Cerdeiro

International Monetary Fund (IMF) ( email )

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

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
22
Abstract Views
105
PlumX Metrics