Real effective exchange rates (REERs) are widely used to gauge competitiveness. Yet conventional REERs, based on gross trade flows and consumer price indexes (CPIs), are not well suited to that role when imports are used to produce exports – i.e., with vertical specialisation in trade.
Value-added exchange rates
Rudolfs Bems, Robert Johnson, 6 December 2012
Estimating trade elasticities: Demand composition and the trade collapse of 2008–09
Matthieu Bussière, Fabio Ghironi, Giulia Sestieri, 14 February 2012
Supply chains and behind-the-border trade barriers: Implications for developing nations
Michael J Ferrantino, 11 February 2012
In recent decades, it has become increasingly common to produce goods in a number of geographically dispersed stages linked by international trade.
The importance of exports and services trade re-evaluated
Henrik Isakson, 25 June 2011
It took some time before the concept of vertical specialisation, coined by Hummels, Ishii, and Yi in 2001, reached a broader non-academic audience. Estimating the import content of exports was not something that bothered policymakers. Today however, this formerly academic exercise is at the core of the debate in the trade policy community.
Supply chains and financial shocks: Real transmission channels in globalised production networks
Hubert Escaith, Fabien Gonguet, 16 June 2009
The most recent phase of globalisation was characterised by the geographical fragmentation of the production processes within networks of firms. Vertical integration helped international firms to improve their efficiency, while enabling them to react more rapidly to changes in international markets.
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Reichlin, Baldwin, 14 April 2013
Reichlin, Turner, Woodford