Real Exchange Rate Movements in Developed and Developing Economies: A Reinterpretation of the Balassa-Samuelson Hypothesis* Real Exchange Rate Movements in Developed and Developing Economies: A Reinterpretation of the Balassa-Samuelson Hypothesis.

• Autores: Taya Dumrongrittikul
• Localización: Economic record, ISSN 0013-0249, Vol. 88, Nº. 283, 2012, págs. 537-553
• Idioma: inglés
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• Resumen

  • This article applies panel-data techniques to examine the Balassa-Samuelson hypothesis (BSH) for 33 countries. We introduce a new approach for classifying traded and non-traded industries which allows for country-specific heterogeneity over each industry and changes in classifications across periods. We find that in developed countries, productivity growth in traded goods leads to a real depreciation of the currency, inconsistent with the BSH; however, higher growth countries experience real appreciation. The results of developing countries support the BSH in that higher productivity growth in traded goods leads to real appreciation.