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New indicators to assess price-competitiveness developments in the four largest euro-area countries and in their main trading partners

Author

Listed:
  • Felettigh, Alberto

    (Banca d'Italia)

  • Giordano, Claire

    (Banca d'Italia)

  • Oddo, Giacomo

    (Banca d'Italia)

  • Romano, Valentina

    (Banca d'Italia)

Abstract

This paper provides a new set of monthly price-competitiveness indicators for 62 countries, which are to be adopted by the Bank of Italy as its new official indicators. We employ updated trade weights that take into account the highly relevant competitive pressures of local producers in all outlet markets while guaranteeing a vast geographical coverage in international standards. We also assess price competitiveness with respective to different sub-groups of trading partners, namely euro-area vs. non euro-area countries. Focusing on the four largest economies in the euro area, in the period 1999-2014 Germany and France's price competitiveness is found to have improved; it was roughly stable in Italy whereas it deteriorated in Spain.

Suggested Citation

  • Felettigh, Alberto & Giordano, Claire & Oddo, Giacomo & Romano, Valentina, 2016. "New indicators to assess price-competitiveness developments in the four largest euro-area countries and in their main trading partners," Journal of Economic and Social Measurement, IOS Press, issue 3, pages 203-235.
    • Handle: RePEc:ris:iosjes:0056
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    References listed on IDEAS

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    5. Claire Giordano & Francesco Zollino, 2016. "Shedding Light on Price- and Non-price-competitiveness Determinants of Foreign Trade in the Four Largest Euro-area Countries," Review of International Economics, Wiley Blackwell, vol. 24(3), pages 604-634, August.
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    9. Mico Loretan, 2005. "Indexes of the foreign exchange value of the dollar," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), vol. 91(Win), pages 1-8.
    10. Tkačevs, Olegs & Christodoulopoulou, Styliani, 2014. "Measuring the effectiveness of cost and price competitiveness in external rebalancing of euro area countries: What do alternative HCIs tell us?," Working Paper Series 1736, European Central Bank.
    11. Michael P. Leahy, 1998. "New summary measures of the foreign exchange value of the dollar," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), vol. 84(Oct), pages 811-818, October.
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    Cited by:

    1. Alberto Felettigh & Claire Giordano, 2018. "Rethinking prices and markets underlying price-competitiveness indicators," Questioni di Economia e Finanza (Occasional Papers) 447, Bank of Italy, Economic Research and International Relations Area.
    2. Silvia Fabiani & Alberto Felettigh & Claire Giordano & Roberto Torrini, 2019. "Making room for new competitors. A comparative perspective on Italy’s exports in the euro-area market," Questioni di Economia e Finanza (Occasional Papers) 530, Bank of Italy, Economic Research and International Relations Area.
    3. Michael Fidora & Claire Giordano & Martin Schmitz, 2021. "Real Exchange Rate Misalignments in the Euro Area," Open Economies Review, Springer, vol. 32(1), pages 71-107, February.
    4. Guido Bulligan & Fabio Busetti & Michele Caivano & Pietro Cova & Davide Fantino & Alberto Locarno & Lisa Rodano, 2017. "The Bank of Italy econometric model: an update of the main equations and model elasticities," Temi di discussione (Economic working papers) 1130, Bank of Italy, Economic Research and International Relations Area.
    5. Matteo Bugamelli & Silvia Fabiani & Stefano Federico & Alberto Felettigh & Claire Giordano & Andrea Linarello, 2018. "Back on Track? A Macro–Micro Narrative of Italian Exports," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 4(1), pages 1-31, March.
    6. Andrea Ginzburg & Annamaria Simonazzi, 2017. "Out of the Crisis. A radical change of strategy for the Eurozone," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 14(1), pages 13-37, June.

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    More about this item

    Keywords

    Real effective exchange rates; price competitiveness; producer prices; local producers competition; double weighting;
    All these keywords.

    JEL classification:

    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values

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