Conceptual ambiguities and statistical weaknesses hamper the assessment of external competitiveness. The term competitiveness, while applied extensively, is often imprecisely defined, which can result in analytical errors and mistaken policy advice. Furthermore, aggregate statistical measures of...

This paper examines the impact of trade costs on real exchange rate volatility. We incorporate a multi-country Ricardian model of trade, based on the work of Eaton and Kortum (2002), into a macroeconomic model to show how bilateral real exchange rate volatility depends on relative technological...

This paper examines the impact of trade costs on real exchange rate volatility. The channel is examined by constructing a two-country Ricardian model of trade, based on the work of Dornbusch, Fischer, and Samuelson (1977), which shows that higher trade costs result in a larger nontradable...

The changes to the structure of Japanese exports and imports in the second half of the 1980s departed significantly from past trends. Econometric analysis confirms that some of the structural changes—notably the importance of consumer goods trade—cannot be fully explained using conventional...

The IMF Working Papers series is designed to make IMF staff research available to a wide audience. Almost 300 Working Papers are released each year, covering a wide range of theoretical and analytical topics, including balance of payments, monetary and fiscal issues, global liquidity, and...

This Selected Issues paper examines Netherlands’ experience with macroeconomic and structural reforms. The reforms, which were introduced gradually and in a consultative manner, were comprehensive in their coverage. They included a credible monetary policy, based on a tight link to the...

This Selected Issues paper examines the strengthening of the external current account for the Netherlands. It reviews this issue, concluding that the change in corporate profitability in a new wage environment was a crucial element, alongside fiscal consolidation, in turning around the current...

The paper examines the evolution of the institutional setup of Lithuania''s Currency Board Arrangement (CBA) and competitiveness from 1994 through 2001, with a view to determining the resilience of the Lithuanian CBA to external shocks in 2002-03. First, several indicators of competitiveness are...

During the twin crises of 2008–09 Georgia’s foreign exchange reserves have been exposed to a number of external and internal drains. Its exports declined by 21 percent from peak to trough. Bank deposits declined by more than 20 percent in late 2008–early 2009, while deposit dollarization...