The Balassa-Samuelson effect reversed: new evidence from OECD countries
Abstract This paper reconsiders the Balassa-Samuelson (BS) hypothesis. We analyze an OECD country panel from 1970 to 2008 and compare three data sets on sectoral productivity, including newly constructed data on total factor productivity. Overall, our within- and between-dimension estimation results...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
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SpringerOpen
2019-02-01
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| Series: | Swiss Journal of Economics and Statistics |
| Subjects: | |
| Online Access: | http://link.springer.com/article/10.1186/s41937-019-0029-3 |
| _version_ | 1818030287476490240 |
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| author | Matthias Gubler Christoph Sax |
| author_facet | Matthias Gubler Christoph Sax |
| author_sort | Matthias Gubler |
| collection | DOAJ |
| description | Abstract This paper reconsiders the Balassa-Samuelson (BS) hypothesis. We analyze an OECD country panel from 1970 to 2008 and compare three data sets on sectoral productivity, including newly constructed data on total factor productivity. Overall, our within- and between-dimension estimation results do not support the BS hypothesis. For the time since the mid-1980s, we find a robust negative relationship between productivity in the tradable sector and the real exchange rate, even after including the terms of trade to control for the effects of the home bias. Earlier, supportive findings may depend on the choice of the data set and the model specification. |
| first_indexed | 2024-12-10T05:33:11Z |
| format | Article |
| id | doaj.art-d44c9c5cc4f841c6979419529a2f5d4f |
| institution | Directory Open Access Journal |
| issn | 2235-6282 |
| language | English |
| last_indexed | 2024-12-10T05:33:11Z |
| publishDate | 2019-02-01 |
| publisher | SpringerOpen |
| record_format | Article |
| series | Swiss Journal of Economics and Statistics |
| spelling | doaj.art-d44c9c5cc4f841c6979419529a2f5d4f2022-12-22T02:00:29ZengSpringerOpenSwiss Journal of Economics and Statistics2235-62822019-02-01155112110.1186/s41937-019-0029-3The Balassa-Samuelson effect reversed: new evidence from OECD countriesMatthias Gubler0Christoph Sax1Swiss National BankUniversity of BaselAbstract This paper reconsiders the Balassa-Samuelson (BS) hypothesis. We analyze an OECD country panel from 1970 to 2008 and compare three data sets on sectoral productivity, including newly constructed data on total factor productivity. Overall, our within- and between-dimension estimation results do not support the BS hypothesis. For the time since the mid-1980s, we find a robust negative relationship between productivity in the tradable sector and the real exchange rate, even after including the terms of trade to control for the effects of the home bias. Earlier, supportive findings may depend on the choice of the data set and the model specification.http://link.springer.com/article/10.1186/s41937-019-0029-3Real exchange rateBalassa-Samuelson hypothesisPanel data estimationTerms of trade |
| spellingShingle | Matthias Gubler Christoph Sax The Balassa-Samuelson effect reversed: new evidence from OECD countries Swiss Journal of Economics and Statistics Real exchange rate Balassa-Samuelson hypothesis Panel data estimation Terms of trade |
| title | The Balassa-Samuelson effect reversed: new evidence from OECD countries |
| title_full | The Balassa-Samuelson effect reversed: new evidence from OECD countries |
| title_fullStr | The Balassa-Samuelson effect reversed: new evidence from OECD countries |
| title_full_unstemmed | The Balassa-Samuelson effect reversed: new evidence from OECD countries |
| title_short | The Balassa-Samuelson effect reversed: new evidence from OECD countries |
| title_sort | balassa samuelson effect reversed new evidence from oecd countries |
| topic | Real exchange rate Balassa-Samuelson hypothesis Panel data estimation Terms of trade |
| url | http://link.springer.com/article/10.1186/s41937-019-0029-3 |
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