This paper examines a productivity-based explanation of the long run real exchange rate movements of six Asian economies. Using industry level data, we construct total factor productivities (TFPs) for the tradable and nontradable sectors. We …nd that (a) within each country the relative price of nontradable goods is cointegrated with the sectoral TFP di¤erential, and (b) the real exchange rates...

This paper focuses on productivity growth differentials between manufacturing and services, deindustrialization, and changes in the real exchange rate. Using a Ricardian trade model with a continuum of goods that introduces nontraded services, the paper investigates these interrelationships. The main results are as follows: (i) if deindustrialization proceeds in both home and foreign countries,...

Purpose This study aims to explore the long-run equilibrium relationship between India’s real exchange rate and sectoral productivity trends using internationally comparable KLEMS databases on for India, China, Euro area, USA, UK Japan. Design/methodology/approach uses pooled mean group estimations panel data suggested by Pesaran et al. (1999). method is chosen because of presence variables wit...

This paper examines the relationship between economic growth and tourism development in seven Mediterranean countries. The purpose of this paper is to investigate empirically the long-run relationship between economic growth and tourism development in a multivariate model with tourism real receipts per capita, the number of international tourist arrivals per capita; real effective exchange rate...

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...