ABSTRACT
The issues of international competitiveness and integration in the global economy play a central role in the discussion on development and there is no indication that their importance will decline in the near future. At the analytical level, and often at the policy level as well, competitiveness is seen largely in real or trade terms, at the expense of the key roles that financial factors, and institutional and other micro-level features play in determining how successful a country’s trade and competitiveness position is. Trade theories are for the most part silent on financial issues while policy makers cannot afford the luxury of seeing the two as separate or, worse, unconnected. Likewise, once financial issues are brought into the picture it is not possible to ignore the role of the macroeconomic factors and their interaction with the microeconomic structure of the economy.
