Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/73425
Authors: 
Schmillen, Achim
Year of Publication: 
2011
Series/Report no.: 
BGPE Discussion Paper 102
Abstract: 
The assumption that national labor markets are homogenous across tradable and non-tradable goods is common in multisector (open-economy) macro models and crucial for the prominent Balassa-Samuelson hypothesis. This study tests it with a novel method to distinguish the tradable and non-tradable sectors grounded in economic theory, modern empirical methods and a large and detailed macro data set. It nds that both the internal relationship between productivity and wages in the tradable and non-tradable sectors postulated by the Balassa-Samuelson hypothesis and its external transmission mechanism are rejected.
Subjects: 
Balassa-Samuelson
Wage equalization
Tradability
JEL: 
F31
F41
Document Type: 
Working Paper

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