The Balassa–Samuelson effect and pricing-to-market: The role of strategic complementarity
Eddy Bekkers () and
Ina Simonovska ()
Economics Letters, 2015, vol. 126, issue C, 156-158
Combining Balassa–Samuelson effects with strategic complementarities between prices of tradables and non-tradables yields a novel determinant of tradables’ prices. A larger productivity difference between tradables and non-tradables raises the non-tradables’ price. With strategic complementarities, producers of tradables also increase prices.
Keywords: Strategic complementarity; Relative prices; Tradables; Non-tradables; Balassa–Samuelson effect (search for similar items in EconPapers)
JEL-codes: F12 F14 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:126:y:2015:i:c:p:156-158
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