In a narrow sense, competitiveness is often about shortterm developments, as measured by a range of various indicators, including, in particular, relative labour and other input costs. It is very important to pay attention to these variables.
For instance, it is likely that sharp losses in competitiveness, stemming from exchange rate changes or excessive earnings growth domestically, could adversely impact on the traded goods sectors and cause damage that could take a long time to undo, through losses in market shares and the closure of firms. One has to distinguish this concern, however, from a concern about longer term developments.