Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/154169
Authors: 
Christodoulopoulou, Styliani
Tkacevs, Olegs
Year of Publication: 
2014
Series/Report no.: 
ECB Working Paper 1736
Abstract: 
This study examines the marginal effects of traditional determinants of exports and imports with a focus on the role of price competitiveness in restoring external balances. It is a first attempt to compare marginal effects of various harmonised competitiveness indicators (HCIs) on both exports and imports of both goods and services across individual euro area countries. We find evidence that HCIs based on broader cost and price measures have a larger marginal effect (with some exceptions) on exports of goods. Exports of services are sensitive to HCIs in big euro area countries and Slovakia, where exports of services are also found more sensitive to competitiveness indicators based on broader price measures. Imports of goods and imports of services are quite insensitive to changes in relative prices. Finally, in some cases measures of fit indicate that a large unexplained residual part is present, implying that other non-price related factors might play an important role in driving foreign trade.
Subjects: 
euro area
export
imports
price competitiveness
real exchange rate
JEL: 
F14
F31
F41
ISBN: 
978-92-899-1144-3
Document Type: 
Working Paper

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