Transfer Effect in National Price Levels
Jaewoo Lee ()
International Finance from EconWPA
A model of national price levels is developed to lay bare implicit assumptions behind the conventional view on the effect of productivity differentials and net foreign assets. The effect of productivity on national price levels is determined by the interaction of several countervailing channels, implying that the net effect can go in either direction for reasonable parameter values. By comparison, net foreign assets have a more robust effect on national price levels than productivity differentials. Basic theoretical implications are confirmed by the price level data of OECD countries.
Keywords: price levels; productivity; net foreign assets (search for similar items in EconPapers)
JEL-codes: F3 F4 (search for similar items in EconPapers)
Note: Type of Document - pdf; pages: 36
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Journal Article: Transfer Effect in National Price Levels (2007)
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Persistent link: http://EconPapers.repec.org/RePEc:wpa:wuwpif:0512004
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