The Balassa-Samuelson Model: an Overview

Balassa-Samuelson Effect in the CEECs?

This paper offers a detailed assessment of the Balassa-Samuelson (BS) effect in eight Central and Eastern European countries (CEEC8). Several features distinguish this study from others: First, we investigate a variety of specifications of extended models. Nonhomogeneity of wages, deviations from PPP in tradables and demand side variables are found to importantly contribute to explain inflation...

The Price of Development: the Penn-Balassa-Samuelson effect revisited∗

The Penn-Balassa-Samuelson effect is the stylized fact about the positive correlation between cross-country price level and per-capita income. This paper provides evidence that the price-income relation is actually non-linear and turns negative among low income countries. The result is robust along both cross-section and panel dimensions. Additional robustness checks show that biases in PPP est...

The data of GDP and exchange rate used in the Balassa–Samuelson hypothesis

This article introduces the data of the log real GDP per capita ratio and the log real exchange rate which are used to revisit the Balassa-Samuelson Hypothesis. We acquired the data from IMF and World Bank database, and provide the name and source of the data. All data are openly accessible. Besides, we describe the value of data as well as the method to process the data which can also be found...

Productivity, the Terms of Trade, and the Real Exchange Rate: The Balassa-Samuelson Hypothesis Revisited

Does the Balassa - Samuelson theory explain the link between relative population growth and purchasing power parity ?

Relative population growth affects relative prices through the so-called BalassaSamuelson (BS) mechanism and that in turn impacts PPP. This paper empirically investigates the relationship between PPP exchange rate and relative population growth in a panel of 80 selected countries. Following the Balassa-Samuelson hypothesis this paper argues that relative population growth affects nominal wages ...