Abstract
This study looks at international competitiveness of agriculture in the United States and the European Union. At the outset, it is necessary to define a measure of competitiveness. We define international competitiveness as the price of output in the member states of the European Union relative to that in the United States. We then decompose relative price movements into changes in relative input prices and changes in relative productivity levels. Our price comparisons indicate that the United States was more competitive than its European counterparts throughout the period 1973–2002, except for the years 1973–1974 and 1983–1985. Our results also suggest that the relative productivity level was the most important factor in determining international competitiveness. Over time, however, changes in competitiveness were strongly influenced by variations in exchange rates through their impact on relative input prices. During the periods 1979–1984 and 1996–2001, the strengthening dollar helped the European countries improve their competitive position, even as their relative productivity performance lagged.
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Ball, V.E., Butault, JP., Juan, C.S., Mora, R. (2010). Agricultural Competitiveness. In: Ball, V., Fanfani, R., Gutierrez, L. (eds) The Economic Impact of Public Support to Agriculture. Studies in Productivity and Efficiency, vol 7. Springer, New York, NY. https://doi.org/10.1007/978-1-4419-6385-7_13
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DOI: https://doi.org/10.1007/978-1-4419-6385-7_13
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