This study tests empirically the Balassa-Samuelson (BS) hypothesis using annual data for 12 OECD countries. New panel data cointegration techniques recently developed by Pedroni (2000) are applied and the results are compared with those obtained with conventional Johansen (1995)'s time series...

This paper tests empirically the Balassa-Samuelson (BS) hypothesis (i.e. rapid economic growth is accompanied by real exchange rate appreciation because of differential productivity growth between tradable and non-tradable sectors) using annual data for twenty Latin American countries. The paper...