Does the Productivity-Bias Hypothesis Hold in the Transition? Evidence from Five CEE Economies in the 1990s
The validity of the Balassa-Samuelson effect seems to be something of a stylized fact for transition countries. This article addresses the question as to whether the productivity bias hypothesis holds for the Czech Republic, Hungary, Poland, Slovakia, and Slovenia between 1991 and 2000. In so doing, vector autoregression model-based (VAR) cointegration analysis is employed. The results are rather varied and suggest that the Balassa-Samuelson effect is not of the same importance for each country. Generally, we find long-term cointegration relationships between productivity growth and relative prices while the link between relative prices and the real exchange rate is found to be much weaker.We then determine the extent to which the Balassa-Samuelson effect may influence inflation and real exchange rates during transition.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 40 (2002)
Issue (Month): 2 (March)
|Contact details of provider:|| Web page: http://mesharpe.metapress.com/link.asp?target=journal&id=106044|
When requesting a correction, please mention this item's handle: RePEc:mes:eaeuec:v:40:y:2002:i:2:p:5-37. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Chris Nguyen)
If references are entirely missing, you can add them using this form.