## International Competitiveness of the Mediterranean Quartet: A Heterogeneous-Product Approach

_IMF Working Papers, October 1, 2008_

## Source details

**Canonical URL:** [International Competitiveness of the Mediterranean Quartet: A Heterogeneous-Product Approach](https://www.imf.org/en/publications/wp/issues/2016/12/31/international-competitiveness-of-the-mediterranean-quartet-a-heterogeneous-product-approach-22113)

## Other formats

- [Markdown version](/en/publications/wp/issues/2016/12/31/international-competitiveness-of-the-mediterranean-quartet-a-heterogeneous-product-approach-22113/index.md)
- [Structured JSON version](/en/publications/wp/issues/2016/12/31/international-competitiveness-of-the-mediterranean-quartet-a-heterogeneous-product-approach-22113/index.json)
- [Bundle manifest](/en/publications/wp/issues/2016/12/31/international-competitiveness-of-the-mediterranean-quartet-a-heterogeneous-product-approach-22113/bundle-manifest.json)

## Bibliographic details
- Authors: Herman Z Bennett, Ziga Zarnic
- Published: October 1, 2008
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451870985.001

---

### Methodology
- Develops a methodology to estimate the real effective exchange rate (REER) that incorporates two elements not considered in the current literature:
  - (i) product heterogeneity when identifying each country's international competitors and their weights.
  - (ii) a comprehensive treatment of services exports.

### Scope and Sample
- Applies the methodology to the Mediterranean Quartet (MQ): Greece, Italy, Portugal, and Spain.
- Compares MQ results to the rest of the euro area countries using the same methodology (difference-in-difference estimates).

### Key Findings
- The refined REER measure suggests a modest reduction in the observed REER gap between the MQ countries and the other euro area countries.
- Considering product heterogeneity and services exports implies a lower real appreciation from 1998 to 2006 on the order of 2-3 percent for all MQ countries.
- The results are reported as difference-in-difference estimates relative to the rest of the euro area countries using the same methodology.

### Subjects and Keywords
- Subjects: Competition, Exports, Manufacturing, Real effective exchange rates, Service exports
- Keywords: base year, cost competitiveness, emerging market, growth rate, WP

---

## Content in this bundle

- **Wp08240**
  - [Wp08240 (Markdown version)](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2008/_wp08240.pdf.md){rel="alternate" type="text/markdown"}
  - [Wp08240 (PDF)](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2008/_wp08240.pdf){rel="external" type="application/pdf"}

---

_Source: https://www.imf.org/en/publications/wp/issues/2016/12/31/international-competitiveness-of-the-mediterranean-quartet-a-heterogeneous-product-approach-22113_