Industrial Structure, Competitiveness, and Trade
This paper examines the effect of sector-specific growth on real exchange rates, competitiveness, and the trade balance. Growth and accumulation in export- and import-competing industries exert their primary effect on the trade balance, while the direct effect of accumulation in non-tradables is on the real exchange rate. Thus, exchange-rate policies that are incompatible with non-tradables equilibrium are bound to fail. Furthermore, growth policies with strong biases toward tradables are often inferior to more balanced strategies, due to their adverse implications for real-exchange- rate movements and the trade balance.
Copyright © 1990 Published by Elsevier Inc.
Sven W. Arndt, Industrial structure, competitiveness, and trade, North American Review of Economics and Finance, Volume 1, Issue 2, Autumn 1990, Pages 217-224, ISSN 1042-752X, 10.1016/1042-752X(90)90016-9. (http://www.sciencedirect.com/science/article/pii/1042752X90900169)