Do Long-Run Productivity Differentials Explain Long-Run Real Exchange Rates?:
We develop a two-country, balanced-growth intertemporal general equilibrium model to examine two predictions of the Balassa-Samuelson model, namely that (i) productivity differentials determine the domestic relative price of nontradables and (ii) deviations from purchasing power parity reflect diffe...
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1. Verfasser: | |
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Format: | Elektronisch E-Book |
Sprache: | English |
Veröffentlicht: |
Washington, D.C
International Monetary Fund
1994
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Schriftenreihe: | IMF Working Papers
Working Paper No. 94/60 |
Online-Zugang: | UBW01 UEI01 LCO01 SBR01 UER01 SBG01 UBG01 FAN01 UBT01 FKE01 UBY01 UBA01 FLA01 UBM01 UPA01 UBR01 FHA01 FNU01 BSB01 TUM01 Volltext |
Zusammenfassung: | We develop a two-country, balanced-growth intertemporal general equilibrium model to examine two predictions of the Balassa-Samuelson model, namely that (i) productivity differentials determine the domestic relative price of nontradables and (ii) deviations from purchasing power parity reflect differences in the relative price of nontradables. In our model, the equilibrium relative price of nontradables along the long-run balanced-growth path is determined by the ratio of the marginal products of labor in the tradable and nontradable sectors. The empirical relevance of the Balassa-Samuelson predictions is examined using the Hodrick-Prescott filter to extract long-run components from a panel database for fourteen OECD countries. The evidence indicates that labor productivity differentials do explain long-run, cross-country differences in relative prices. The predicted relative prices, however, are of little help in explaining long-run deviations from purchasing power parity |
Beschreibung: | 1 Online-Ressource (46 p) |
ISBN: | 145184798X 9781451847987 |
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spelling | Asea, Patrick K. Verfasser aut Do Long-Run Productivity Differentials Explain Long-Run Real Exchange Rates? Asea, Patrick K Washington, D.C International Monetary Fund 1994 1 Online-Ressource (46 p) txt rdacontent c rdamedia cr rdacarrier IMF Working Papers Working Paper No. 94/60 We develop a two-country, balanced-growth intertemporal general equilibrium model to examine two predictions of the Balassa-Samuelson model, namely that (i) productivity differentials determine the domestic relative price of nontradables and (ii) deviations from purchasing power parity reflect differences in the relative price of nontradables. In our model, the equilibrium relative price of nontradables along the long-run balanced-growth path is determined by the ratio of the marginal products of labor in the tradable and nontradable sectors. The empirical relevance of the Balassa-Samuelson predictions is examined using the Hodrick-Prescott filter to extract long-run components from a panel database for fourteen OECD countries. The evidence indicates that labor productivity differentials do explain long-run, cross-country differences in relative prices. The predicted relative prices, however, are of little help in explaining long-run deviations from purchasing power parity Online-Ausg Mendoza, Enrique G. Sonstige oth http://elibrary.imf.org/view/IMF001/01808-9781451847987/01808-9781451847987/01808-9781451847987.xml Verlag URL des Erstveröffentlichers Volltext |
spellingShingle | Asea, Patrick K. Do Long-Run Productivity Differentials Explain Long-Run Real Exchange Rates? |
title | Do Long-Run Productivity Differentials Explain Long-Run Real Exchange Rates? |
title_auth | Do Long-Run Productivity Differentials Explain Long-Run Real Exchange Rates? |
title_exact_search | Do Long-Run Productivity Differentials Explain Long-Run Real Exchange Rates? |
title_exact_search_txtP | Do Long-Run Productivity Differentials Explain Long-Run Real Exchange Rates? |
title_full | Do Long-Run Productivity Differentials Explain Long-Run Real Exchange Rates? Asea, Patrick K |
title_fullStr | Do Long-Run Productivity Differentials Explain Long-Run Real Exchange Rates? Asea, Patrick K |
title_full_unstemmed | Do Long-Run Productivity Differentials Explain Long-Run Real Exchange Rates? Asea, Patrick K |
title_short | Do Long-Run Productivity Differentials Explain Long-Run Real Exchange Rates? |
title_sort | do long run productivity differentials explain long run real exchange rates |
url | http://elibrary.imf.org/view/IMF001/01808-9781451847987/01808-9781451847987/01808-9781451847987.xml |
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