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Measuring export competitiveness: revisiting the effective exchange rate weights for the euro area countries

Author

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  • Paulo Esteves
  • Carolina Reis

Abstract

This article addresses the competition faced by exporters as a particular motivation to compute an effective exchange rate, discussing some important implications of the simplifying assumptions usually made regarding the selection of competitors and differences in product specialization. Firstly, the selection of competitors is not limited to the countries initially chosen according to their share in exports. Secondly, competition in third markets is evaluated in order to account for the different product specialization of each country. This different approach is then applied to the 12 euro countries using data for 2004.

Suggested Citation

  • Paulo Esteves & Carolina Reis, 2006. "Measuring export competitiveness: revisiting the effective exchange rate weights for the euro area countries," Working Papers w200611, Banco de Portugal, Economics and Research Department.
    • Handle: RePEc:ptu:wpaper:w200611
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    File URL: https://www.bportugal.pt/sites/default/files/anexos/papers/wp200611.pdf
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    References listed on IDEAS

    as
    1. Sónia Cabral, 2004. "Recent Evolution of Portuguese Export Market Shares in the European Union," Economic Bulletin and Financial Stability Report Articles and Banco de Portugal Economic Studies, Banco de Portugal, Economics and Research Department.
    2. Thimann, Christian & Buldorini, Luca & Makrydakis, Stelios, 2002. "The effective exchange rates of the euro," Occasional Paper Series 2, European Central Bank.
    3. Luca Buldorini & Stelios Makrydakis & Christian Thimann, 2002. "The effective exchange rates of the euro," Occasional Paper Series 02, European Central Bank.
    4. Carlos Coimbra, 2004. "New Effective Exchange Rate Index for the Portuguese Economy," Economic Bulletin and Financial Stability Report Articles and Banco de Portugal Economic Studies, Banco de Portugal, Economics and Research Department.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Erika Arraño & Faruk Miguel, 2015. "Tipo de Cambio Real: Revisión Internacional," Economic Statistics Series 112, Central Bank of Chile.
    2. Fernando Alexandre & Pedro Bação & João Cerejeira & Miguel Portela, 2009. "Aggregate and sector-specific exchange rate indexes for the Portuguese economy," Notas Económicas, Faculty of Economics, University of Coimbra, issue 30, pages 6-28, December.
    3. Oguzhan Ozcelik, 2022. "Does the Foreign Trade-Driven Competitive Power of Transition Economies Converge Toward that of EU14 Countries? Evidence from Fourier Panel Unit Root Test with Sharp and Smooth Breaks," EKOIST Journal of Econometrics and Statistics, Istanbul University, Faculty of Economics, vol. 0(36), pages 257-282, June.

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    More about this item

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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