European Economy. Economic Papers. Germany's growth performance in the 1990's

pre-unification period
in the late 1980s during which competitiveness indicators
showed only minor variation,
•
the 
early post-unification period
(1990-1993) marked by a significant deterioration in
price and cost competitiveness for Germany,
•
the 
exchange-rate-turbulence period
in the mid-1990s (1994-1996) during which all
series peaked (i.e. reach their turning point), starting to indicate improvements thereafter,
35
Much of this discussion was stimulated by Krugman (1994) who noted that it is an illusion that countries
compete with each in the same way as companies do. His point of view is that if competitiveness means
anything, it means that the standard of living depends on productivity relative to that of other countries,
implying that if other countries become more productive then, other things equal, the home country may be
considered worse off. In that sense he called competitiveness a very primitive, actually mercantilist notion
dressed up in modernist garb.
36
Due to the introduction of the single currency in 1999 the term “exchange rate” has to be replaced by the term
“indicator”. However, as most of the period analysed in this sub-section are years with national currencies in
place the term exchange rate will be used with the understanding that for the years 1999-2001 this should be
understood as a synonym for “indicators”.
37
For a discussion of the benefits of using a set of price and cost series see e.g. Turner and Golub (1997) and
Bundesbank (1998).

---

•
the 
pre-euro years
(1997-1998) during which competitiveness indicators stabilise
somewhat at least to some extent reflecting the sharp fall in the exchange rates of some
Asian countries, and finally
•
the