September 15, 2012

Competitiveness in the Eurozone

Deutsche Bank in his report on competitiveness noted the following:

"investors invest in companies and the countries are the platform of the companies. Therefore, an understanding of global competiveness of countries is key for investors"

It is most helpful to look at the combination of competiveness and hourly wages.

The more competitive a country is, the higher its wages can be justified.

There is a clear relation between the two variables. Countries below the regression curve have a strong competiveness rank relative to their labour costs while countries above the curve have a lower competiveness rank relative to their labour costs.


and here why PIIGS are screwing up:
 

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