International Monetary Fund:F&D Magazine: Politicians Strive for Competitiveness

 

Politicians Strive for Competitiveness JUNE 2025  (Credit: iStock / erhui1979) Competitiveness, Michael Porter remarked in The Competitive Advantage of Nations, his 1990 best-selling book, means different things to different people. As a member of US President Ronald Reagan’s competitiveness commission in the 1980s, the American economist met business leaders who believed it was about a global strategy to compete in world markets and members of Congress who thought it meant having a positive balance of trade. Today this commonly used term continues to defy definition and to divide opinion, Kevin Fletcher writes in F&D.   If increasing competitiveness means boosting productivity, economists would agree that this is almost always and everywhere a worthy goal. But they would also note that more productivity raises a country’s welfare regardless of its effects on exports and even if the country doesn’t trade at all with other countries.   Competitiveness, however, implies that relativity matters—that policymakers are less concerned about their country’s absolute level of productivity than about how it compares with that of other countries. If another country’s productivity is on the rise, it must be bad news, because their own country is becoming less competitive. Does this reasoning stand up? Read more Point of View (Credit: Chantal Jahchan) Reclaiming a Policy Role for Economists | Acknowledging missteps, listening well, defending data, and avoiding jargon will help the profession engage | Karen Dynan   Europe’s Future Hinges on Greater Unity | But first the EU must overcome distrust between its member states and in its institutions | Simon Nixon   We Need a New Growth Compact| Innovation and integration can revive growth amid sweeping geopolitical change | Pierre-Olivier Gourinchas Europe: From Adversity to Advantage (Credit: Brian Stauffer) Europe’s Integration Imperative | The case for closer economic union has become more compelling as external challenges multiply | Alfred Kammer   Europe’s Elusive Savings and Investment Union | An integrated capital market must be accompanied by regulatory reforms to attract substantial investment | Ravi Balakrishnan and Mahmood Pradhan   Europe’s Innovators Are Waking Up| The continent’s innovation success stories and renewed sense of purpose defy criticism of overregulation | Alessandro Merli   Making Germany Grow Again| Long-term, future-focused investment can rescue Europe’s largest economy from stagnation | Ulrike Malmendier and Claudia Schaffranka   Plus, government ministers from three of Europe’s fastest-growing economies share their perspectives on how to revive growth:   Europe’s Economic Revival | Poland’s economic transformation can inspire Europe today | Andrzej Domański   Greece’s Remarkable Recovery | Strong reforms have turned it into one of Europe’s fastest-growing economies | Konstantinos Hatzidakis   Spain’s Shift to Success | Our balanced and sustainable growth is overcoming traditional dilemmas | Carlos Cuerpo “The European Union must unite to shape today’s global economy, rather than be shaped by it.”— F&D editor-in-chief Gita Bhatt Read more Also Featured (Credit: Getty Images/Mirrorpix) A Moving History | Migration has propelled human progress for hundreds of thousands of years | Ian Goldin   Machine Intelligence and Human Judgment | AI could reverse the widening inequality driven by technology, or aggravate it | Ajay Agrawal, Joshua Gans, and Avi Goldfarb   The Debate over Falling Fertility | A decline in global population later this century may threaten human progress, or it may lead to better lives | David E. Bloom, Michael Kuhn, and Klaus Prettner   The Longevity Dividend | Aging populations should be embraced, not feared | Andrew Scott and Peter Piot   Sustaining Growth in an Aging World | Older populations need not lead to slumping economic growth and mounting fiscal pressures | Bertrand Gruss and Diaa Noureldin   Stanley Fischer (1944–2025)| His storied career at the IMF, at central banks, and at universities shaped the study of macroeconomics and the next generation of macroeconomists | James Boughton Our Regular Departments (Credit: Courtesy Monetary Authority of Macao) For Currency Notes, Salsa Mazlan tells how Macao SAR’s unique history has yielded different yet equally elegant versions of the same banknote.   Simon Johnson discusses technology, inequality, and democracy with Bruce Edwards for Café Economics.    Picture This shows how stalled trade and rising tariffs are testing global economic resilience.   Andreas Adriano profiles Agustín Carstens, finance minister, head of the BIS, and central banker with a start-up mentality, for People in Economics.   For books, Mouhamadou Sy reviews Our Dollar, Your Problem: An Insider’s View of Seven Turbulent Decades of Global Finance, and the Road Ahead by Kenneth Rogoff.   Volker Wieland reviews Crisis Cycle: Challenges, Evolution, and Future of the Euro by John H. Cochrane, Luis Garicano, and Klaus Masuch.   And Vivek Arora reviews Entropy Economics: The Living Basis of Value and Production by James K. Galbraith and Jing Chen.   Nick Owen  Managing Editor | Finance & Development   nowen@IMF.org Stay connected with the International Monetary Fund: