Productivity and Real Exchange Rates:Some Empirical Examples

This paper examines the relevance of the Balassa-Samuelson productivity-bias hypothesis for explaining long-run permanent shocks in the real exchange rates. The sample consists of yearly data on real exchange rates and productivity for six OECD countries. On the basis of Johansens maximum likelihood tests and VECMs, we find little support for the hypothesis. Our results provide a weak support for monetary integration in Europe.

MoreLess

Year of publication:	2002
Authors:	Irandoust, Manuchehr ; Sjöö, Boo
Published in:	Journal of Economic Integration. - Department of Economics and Trade. - Vol. 17.2002, p. 527-553
Publisher:	Department of Economics and Trade
Subject:	Real Exchange Rate \| Productivity Differential \| Cointegration \| Balassa-Samuelson’s Effect \| Johansen’s Technique

More details

Type of publication:	Article
Classification:	C32 - Time-Series Models ; E31 - Price Level; Inflation; Deflation ; F31 - Foreign Exchange ; F41 - Open Economy Macroeconomics
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010991780