Towards a System of Multilateral Unit Labor Cost-Based Competitiveness Indicators for Advanced, Developing, and Transition Countries
November 1, 1997
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Summary
This paper attempts to extend the range of countries covered by the IMF’s multilateral real exchange rate indexes based on relative unit labor costs (REER-ULCs) in manufacturing. A data set was assembled that permits calculation of REER-ULCs for 23 newly industrialized, developing, and transition countries in addition to the 21 industrial countries covered by the current system. Although the results are mostly quite encouraging, they should be considered preliminary because of uncertainty about the reliability and comparability of the underlying data. Also, unit labor costs are not available on as timely a basis as consumer price indexes (CPIs), especially for nonindustrial countries. Thus, the ULC-based indicators should supplement rather than replace the current CPI-based system.
Subject: Competition, Exchange rates, Financial markets, Foreign exchange, Labor, Labor costs, Real effective exchange rates, Real exchange rates
Keywords: Africa, coefficient of variation, Competition, competitiveness indicator, cost, effective exchange rates, exchange rate, Exchange rates, export price measure, goods, goods price, labor cost, Labor costs, manufactured goods, Real effective exchange rates, Real exchange rates, standard deviation, WP
Pages:
46
Volume:
1997
DOI:
Issue:
151
Series:
Working Paper No. 1997/151
Stock No:
WPIEA1511997
ISBN:
9781451922882
ISSN:
1018-5941
