This paper investigates the Balassa-Samuelson effect for nine CEE transition countries Duval, Romain, “Taux de change réel et effet Balassa-Samuelson. 1The Balassa-Samuelson model (BS hereafter) has achieved workhorse status in the analysis of trends observed in industrialized countries regarding the. By Sylviane Guillaumont Jeanneney and Ping Hua; L’effet Balassa-Samuelson et les différences d’inflation entre les provinces chinoises.

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For technical questions regarding this item, or to baladsa its authors, title, abstract, bibliographic or download information, contact: It also allows you to accept potential citations to this item that we are uncertain about.

The Balassa—Samuelson effect depends on inter-country differences in the relative productivity of the tradable and non-tradable sectors. Porter ‘s The Competitive Advantage of Nations says that currency depreciations can reduce growth, and that ‘overvalued’ currencies can contribute to domestic productivity growth by ‘forcing’ balasa improvements in the tradables sector by exposing it to international competition at unfavourable terms of trade.

For instance, other effects of exchange rate movements might mask the long-term BS-hypothesis mechanism making it harder to detect if it exists. By using this site, you agree to the Terms of Use and Privacy Policy. This page was last edited on 17 Septemberat If you have authored this item and are balqssa yet registered with RePEc, we encourage you to do it here. Refinements to the econometric techniques and debate about alternative models are continuing in the International economics community.

However most services must be delivered locally e. Do we understand what we see? RePEc uses bibliographic data supplied by the respective publishers. In each country, under the assumption of competition in the labor market the wage ends up being equal to the value of the balass product, or the sector’s price times MPL.

Corrections All material on this site has been provided by the respective publishers and authors. F31 – International Economics – – International Finance – – – Foreign Exchange Statistics Access and download statistics Corrections All material on this site has been provided by the respective publishers and authors. By the law of one priceentirely tradable goods cannot vary greatly in price by location because buyers can source from the lowest cost location.

In order to protect domestic producers import barriers are raised, allowing the local price for the traded good to rise beyond the international price. If wealthy countries feel more able to protect their native producers than developing fffet e. Even without Free trade it may be harder to increase the productivity in the service sector as rapidly as in mass-production, so if money exchange rates are still based on the output of mass production the differentials in price level could still be caused by the Balassa—Samuelson effect.


Most professional economists accept that the Balassa—Samuelson effect model has some merit. Webarchive template wayback links All articles with specifically marked weasel-worded phrases Articles with specifically marked weasel-worded phrases from October All articles with unsourced statements Articles with unsourced statements from October Therefore, most of the contemporary authors see for example: Please note that corrections may take a couple of weeks sammuelson filter through the various RePEc services.

Taux de change reel et effet Balassa-Samuelson

Lipsey and Swedenborg show a strong correlation between the barriers to Free trade and the domestic price level. More about this item JEL classification: This alone may shift the consumer price indexand might make the non-trade sector look relatively less productive than it had been when demand was lower; if service quality rather than quantity follows diminishing returns to labour input, a general demand for a higher service quality automatically produces a reduction in per-capita productivity.

General contact details of provider: Evidence from Korea”, Review of International Economics4 3: From Wikipedia, the free encyclopedia. This is because services tend to be superior goodswhich are consumed proportionately more heavily at higher incomes. Note that the lack of a country specific subscript on the price balasxa tradables means that tradable goods prices are equalized between the two countries.

Balassa–Samuelson effect – Wikipedia

Other mechanisms through which RERs can affect productivity growth have been advanced, such as the idea that structural transitions caused by exchange rate volatility have a disruptive effect on the real economy. A typical labour market pattern is that high- GDP countries have a higher ratio of service-sector to traded-goods-sector employment than low-GDP countries.

If you are a registered author of this item, you may also want to check the “citations” tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation. Download full text from publisher File URL: This explanation wamuelson similar to the BS-effect, since an industry needing protection must be measurably less productive in the world market of the commodity it produces.

A pint of pub beer is samuelsoh more expensive in the south of England than the north, but supermarket beer prices are very similar. You can help correct errors and omissions. Although pub beer is transportable, the pub itself is not. In total, since it was rffet discovered inaccording to Tica and Druzic [2] the HBS theory “has been tested 60 times in 98 countries in time series or panel analyses and in countries in cross-country analyses.


Panel data and time series techniques have crowded out old cross-section tests, demand side and terms of trade variables have emerged as explanatory variables, new econometric methodologies have replaced old ones, and recent improvements with endogenous tradability have provided direction for future researchers.

Analysis of empirical data shows that the vast majority of the evidence supports the HBS model. Capital inflows say to the Netherlands may stimulate currency appreciation through demand for money.

L’effet Balassa-Samuelson et les différences d’inflation entre les provinces chinoises

Rudi Dornbusch and others say that income rises can change the ratio of demand for goods and services tradable and non-tradable sectors. Lessons from Singapore”, China Economic Review10 2: However, this reasoning is slightly different from the pure BS-hypothesis, because the goods being produced are ‘traded-goods’, even though protectionist measures mean that they are more expensive on the domestic market than the international market, so they will not be ” traded ” internationally [5].

Partly because empirical findings have been mixed, and partly to differentiate the model from its conclusion, modern papers tend to refer to the Balassa—Samuelson hypothesisrather than the Balassa—Samuelson effect.

This effte be treated as anecdotal evidence in favour of the Balassa—Samuelson hypothesis, since supermarket beer is an easily transportable, traded good. If this were a common balasea then one of the key assumptions of the BS-hypothesis that traded-goods follow the PPP -hypothesis would be invalid.

In this model, there has been no change in real economy productivities, but money price productivity in traded goods has been exogenously lowered through currency appreciation. Retrieved from ” https: When requesting a correction, please samuelsn this item’s handle: The simplest model which generates a Balassa—Samuelson effect has two countries, two goods one tradable, and a country specific nontradable and one factor of production, labor.