Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/25931
Authors: 
García Solanes, José
Sancho-Portero, Francisco I.
Torrejón-Flores, Fernando
Year of Publication: 
2007
Series/Report no.: 
CESifo working paper 1886
Abstract: 
This paper analyses the Balassa and Samuelson hypothesis in two groups of European countries: six New Member States (NMS) and six advanced EU-15 economies. It is found that the second stage of the hypothesis, which relates relative sector prices with the real exchange rate, does not hold anywhere. In the NMS the main reasons are increased demand for domestic tradables stemming from positive differentials in economic growth, probably coupled with quality improvements in domestic tradable goods. In the EU-15, the explanatory factor is segmentation between national markets of tradables, caused by transportation costs, non-tariff barriers and imperfect competition between firms.
JEL: 
E31
F31
C15
Document Type: 
Working Paper

Files in This Item:
File
Size
320.92 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.