Measuring Competitiveness: Trade in Goods or Tasks?
Electronic Access:
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Summary:
With global supply chains, any value added or production task can be traded as part of goods. This means that competitiveness can be measured either in terms of “tasks” (Bems and Johnson, 2012), or goods, but with goods prices reflecting the cost of tasks embedded in those goods. We show that when measuring competitiveness in goods, the formula used in computing the real effective exchange rates at the IMF (Bayoumi, Lee, and Jayanthi, 2005) needs to be expressed in terms of the price of value added and needs an additional term, which captures a gain or loss in competitiveness of goods due to outsourcing.
Series:
Working Paper No. 2013/100
Subject:
Competition Exchange rates Exports Financial markets Foreign exchange International trade Production sharing Real effective exchange rates Taxes
English
Publication Date:
May 8, 2013
ISBN/ISSN:
9781484325803/1018-5941
Stock No:
WPIEA2013100
Pages:
22
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