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Euro Area Export Performance and Competitiveness

Author

Listed:
  • Mr. Jarkko Turunen
  • Mr. Richard T. Harmsen
  • Mr. Tamim Bayoumi

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

  • Mr. Jarkko Turunen & Mr. Richard T. Harmsen & Mr. Tamim Bayoumi, 2011. "Euro Area Export Performance and Competitiveness," IMF Working Papers 2011/140, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2011/140
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    References listed on IDEAS

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