Competitiveness Indicators: A Theoretical and Empirical Assessment
IMF Working Papers, March 1, 1994
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Bibliographic details
- Authors: Ian W. Marsh, Stephen Tokarick
- Published: March 1, 1994
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451844733.001
Summary
- 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.
- Discusses how each measure is associated with changes in a country’s balance of trade in goods and nonfactor services and examines the relationship among these indicators.
- Examines the empirical performance of three of the indicators in terms of their ability to explain trade flows.
Competitiveness indicators analyzed
- 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
- The ratio of normalized unit labor costs to value-added deflators in manufacturing
Associations with trade flows
- Each indicator is discussed in the context of its association with changes in a country’s balance of trade in goods and nonfactor services.
- The paper examines relationships among the five indicators to assess how they interrelate and potentially convey overlapping or distinct information about competitiveness.
Empirical assessment
- The paper empirically evaluates the performance of three of the indicators in terms of their ability to explain trade flows.
- The identity of the three empirically tested indicators is presented in the paper; this overview notes only that three indicators are subjected to empirical evaluation without specifying which ones.