On the suitability of alternative competitiveness indicators for explaining real exports of advanced economies
- We discuss the relative merits of various indicators of international price competitiveness from a conceptual point of view, and empirically check which indicator serves best to predict real exports in the long run. To this end, a panel cointegration analysis is conducted, augmented by a forecast exercise. In the latter, repeated sampling techniques are used in order to avoid arbitrary sample splits. In line with the theoretical reasoning, we find that broad price- and cost-based indicators are to be preferred to narrow price-based measures such as CPI- or PPI-deflated real exchange rates. Furthermore, the evidence points towards using world trade as external activity variable instead of GDP- or real imports-based measures.
Document Type: | Article |
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Language: | English |
Author: | Christoph Fischer, Oliver Hossfeld, Karin Radeck |
Chairs and Professorships: | Chair of Macroeconomics |
DOI: | https://doi.org/10.1007/s11079-017-9457-9 |
Parent Title (English): | Open Economies Review |
ISSN: | 0923-7992 |
Volume: | 29 |
Year of Completion: | 2018 |
First Page: | 119 |
Last Page: | 139 |
Tag: | International price competitiveness; Price elasticity of exports; Real export demand |
Content Focus: | Academic Audience |
Peer Reviewed: | Yes |
Rankings: | AJG Ranking / 2 |
Licence (German): | ![]() |