More Evidence in Favor of the Balassa-Samuelson Hypothesis
AbstractThis study provides additional evidence of a significant long-run relationship between the relative price of nontradables and real output, consistent with the productivity-bias hypothesis of Balassa and Samuelson. The results, however, also indicate that additional permanent supply shocks, specifically real oil prices, need to be considered. In every case, relative prices are significantly affected by permanent innovations in real output and real oil prices. The general lack of evidence of cointegration, however, points to the possibility that additional long-run determinants of relative prices have been omitted. Copyright 2001 by Blackwell Publishing Ltd.
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Bibliographic InfoArticle provided by Wiley Blackwell in its journal Review of International Economics.
Volume (Year): 9 (2001)
Issue (Month): 2 (May)
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