The Relationship Between Productivity and Relative Prices in Romania (Balassa-Samuelson Internal Mechanism)

Nicolae Ghiba

Ovidius University Annals, Economic Sciences Series, 2011, vol. XI, issue 1, 819-823

Abstract: During the catching-up process with the developed European countries, industrial productivity increased with higher rates than in services sector. The aim of the present paper is to test the influence of a growing productivity on relative prices as internal mechanism of Balassa-Samuelson Model. In reaching our purpose we used VEC methodology. Finally, we found a long-run relationship between variables and a weakly connection in the short-run.

Keywords: Balassa-Samuelson internal mechanism; VEC model; productivity differential; relative prices (search for similar items in EconPapers)
JEL-codes: C32 E31 F31 (search for similar items in EconPapers)
Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:ovi:oviste:v:11:y:2011:i:1:p:819-823

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