The policies implemented in response to Europe’s sovereign debt crisis and serious economic imbalances evoke the concept of “competitiveness.” Yet this concept and the measures it implies are ill-suited to Europe’s situation and may worsen its predicament.
Antidumping measures have become an important form of commercial protection for countries, regulated by WTO. The effect of this kind of protection on firm-level productivity is highly heterogeneous. If it allows initially low-productivity domestic firms to restructure and increase their performance, it tends to hurt high-productivity domestic firms and exporters.
