Productivity, Tradability, and the Long-Run Price Puzzle

Paul Bergin, Reuven Glick () and Alan M. Taylor ()

No 10569, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Long-run cross-country price data exhibit a puzzle. Today, richer countries exhibit higher price levels than poorer countries, a stylized fact usually attributed to the Balassa- Samuelson' effect. But looking back fifty years, or more, this effect virtually disappears from the data. What is often assumed to be a universal property is actually quite specific to recent times. What might explain this historical pattern? We adopt a framework where goods are differentiated by tradability and productivity. A model with monopolistic competition, a continuum-of-goods, and endogenous tradability allows for theory and history to be consistent for a wide range of underlying productivity shocks.

JEL-codes: F40 F43 (search for similar items in EconPapers)
Date: 2004-06
Note: DAE ITI PR
View list of references View citations in EconPapers

Downloads: (external link)
http://www.nber.org/papers/w10569.pdf (application/pdf)
Access to the full text is generally limited to series subscribers, however if the top level domain of the client browser is in a developing country or transition economy free access is provided. More information about subscriptions and free access is available at http://www.nber.org/wwphelp.html.

Related works:
Working Paper: Productivity, tradability, and the long-run price puzzle (2004)
Working Paper: Productivity, Tradability and the Long-Run Price Puzzle (2004)
Working Paper: Productivity, Tradability, and the Long-Run Price Puzzle (2005)
Journal Article: Productivity, tradability, and the long-run price puzzle (2006)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:nbr:nberwo:10569

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w10569
The price is Paper copy available by mail.

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc
Address: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Contact information at EDIRC.
Series data maintained by ().