Assessing the adequacy of measures of Australia’s price competitiveness and structural change

Harding, Don (2001): Assessing the adequacy of measures of Australia’s price competitiveness and structural change. Published in: Australian Economic Review , Vol. 34, No. 4 (December 2001): pp. 458-466.

Abstract

There are a plethora of measures of Australia’s international price competitiveness. This article provides a practitioners guide to those series. The currently available measures of international price competitiveness are found to be deficient. A theoretically sound measure is suggested and computer code is supplied to construct estimates.

• Item Type: MPRA Paper
• Additional Information: The definitive version of this paper is available at http://www.blackwell-synergy.com/toc/aere/34/4
• Institution: University of Melbourne
• Language: English
• Keywords: Exchange rates; price competitiveness; structural change
• Subjects: E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E39 - Other; F - International Economics > F3 - International Finance > F31 - Foreign Exchange; E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates > E40 - General

References

Abramowitz, A. and I.A., Stegun (1972), Handbook of Mathematical Functions, Dover Publications, New York. Caves, D.W., L.R., Christensen and E.W., Diewert (1982a), “Multilateral comparisons of output, input and productivity using superlative index numbers”, Economic Journal, vol. 92, pp. 73-86. Caves, D.W., L.R., Christensen and E.W., Diewert (1982a), “The economic theory of index numbers and the measurement of input, output and productivity”, Econometrica, vol. 50, pp. 1393-1414. Denny, M., and M., Fuss (1983), “A general approach to international and interspacial productivity comparisons”, Journal of Econometrics, Vol 23, pp 315-30. Diewert, E., (1976), “Exact and superlative index numbers”, Journal of Econometrics, vol. 4, pp. 115-45. Dixit, A.K., and V., Norman (1980), Theory of International Trade, Cambridge University Press. Dungey, M.H. and A. Joiner (2000), www.anu.edu.au/dungey/realtwi.html Dwyer, J., and P., Lowe (1993), “Alternative Concepts of the Real Exchange Rate: A Reconciliation”, Reserve Bank of Australia, Research Discussion Paper 9309. Guerrieri, P., and C., Milana (1995), “Superlative indexes of price competitiveness and effective exchange rates”, In: B., Quintieri (Ed.), Patterns of Trade, Competition and Trade Policies, Avebury. Jones, M.T., and J., Wilkinson (1990), “Real Exchange Rates and Australian Export Competitiveness” Reserve Bank of Australia, Research Discussion Paper 9005. Tarditi, A., (1996), “Modelling the Australian Exchange Rate, Long Bond Yield and Inflationary Expectations, Reserve Bank of Australia, Research Discussion Paper 9608. Woodland, A.D., (1982), International Trade and Resource Allocation, North Holland.