Competitiveness among nations is often approached as if it were a sports competition: some countries win medals, others lose out. This view of countries fighting it out in the economic arena is especially popular in business circles and among politicians. Economists, however, take a very different approach to international economic relations, arguing that international trade leads not to winners and losers but to win-win situations in which all countries profit. In this volume, leading economists take on the sometimes-derided concept of competitiveness, demonstrating the value of systematic analysis in an area too often dominated by special interest groups who use (and abuse) the concept to advance hidden agendas. The chapters range from broad theoretical views to case studies, examining the multiple factors that drive competitiveness. Contributors consider the conceptual framework underlying the World Economic Forum's approach to competitiveness; differences in per capita GDP between the United States and the European Union; an integrated approach to measuring competitiveness and comparative advantage; divergent trends in price and cost competitiveness in the euro area; methodological issues in constructing competitiveness indicators; taxation and international competitiveness; and a case study of Mexico's competitiveness in world markets in comparison to China's. Contributors: Harry P. Bowen, Michele Ca' Zorzi, Jean-Philippe Cotis, Romain Duval, Christoph Fischer, Michael S. Knoll, Inmaculada Martinez-Zarzoso, Wim Moesen, Felicitas Nowak-Lehmann, Xavier Sala-i-Martin, Bernd Schnatz, Alain de Serres, Eckhard Siggel, Sebastian Vollmer
Series Foreword
Introduction
1 The Economics behind the World Economic Forum's Global Competitiveness Index by Paul De Grauwe 1
2 Competitiveness, Economic Performance, and Structural Policies: An OECD Perspective by Xavier Sala-i-Martin 19
3 Concepts and Measurements of Competitiveness: Toward an Integrated Approach by Romain Duval 95
4 Explaining and Forecasting Euro Area Exports: Which Competitiveness Indicator Performs Best? by Eckhard Siggel 121
5 An Assessment of the Trends in International Price Competitiveness among EMU Countries by Bernd Schnatz 149
6 Benchmarking the Competitiveness of Nations: Benevolence versus Equal Treatment? by Christoph Fischer 181
7 Business Taxes and International Competitiveness: Understanding How Taxes Can Distort Capital Ownership and Designing a Nondistortive International Tax System by Wim Moesen 207
8 Competitiveness: A Comparison of China and Mexico by Michael S. Knoll 255
Contributors by Inmaculada Martinez-Zarzoso 273
Index by Inmaculada Martinez-Zarzoso 275