Competitiveness Indicators: A Theoretical and Empirical Assessment

52 Pages Posted: 15 Feb 2006

See all articles by Ian W. Marsh

Ian W. Marsh

City University London - The Business School

Stephen Tokarick

International Monetary Fund (IMF)

Date Written: March 1994

Abstract

This paper discusses five indicators of competitiveness: real exchange rates based on consumer price indices, export unit values of manufacturing goods, the relative price of traded to nontraded goods, normalized unit labor costs in manufacturing, and the ratio of normalized unit labor costs to value-added deflators in manufacturing. It discusses how each of these measures is associated with changes in a country`s balance of trade in goods and nonfactor services and examines the relationship among these indicators. It then examines the empirical performance of three of the indicators in terms of their ability to explain trade flows.

JEL Classification: F4

Suggested Citation

Marsh, Ian William and Tokarick, Stephen, Competitiveness Indicators: A Theoretical and Empirical Assessment (March 1994). IMF Working Paper No. 94/29, Cass Business School Research Paper, Available at SSRN: https://ssrn.com/abstract=883467

Ian William Marsh (Contact Author)

City University London - The Business School ( email )

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Stephen Tokarick

International Monetary Fund (IMF) ( email )

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Washington, DC 20431
United States