Productivity and Real Exchange Rates:Some Empirical Examples

Manuchehr Irandoust () and Boo Sjöö ()
Additional contact information
Manuchehr Irandoust: University of Örebro, Postal: Department of Economics, University of Örebro, SE-701 82, Örebro, Sweden
Boo Sjöö: University College of Skövde, Postal: Department of Economics, University of College of Skövde, P.O. Box 408, SE-541 28, Skövde, Sweden

Journal of Economic Integration, 2002, vol. 17, 527-553

Abstract:

This paper examines the relevance of the Balassa-Samuelson productivity-bias hypothesis for explaining long-run permanent shocks in the real exchange rates. The sample consists of yearly data on real exchange rates and productivity for six OECD countries. On the basis of Johansens maximum likelihood tests and VECMs, we find little support for the hypothesis. Our results provide a weak support for monetary integration in Europe.

Keywords: Real Exchange Rate; Productivity Differential; Cointegration; Balassa-Samuelson’s Effect; Johansen’s Technique. (search for similar items in EconPapers)
JEL-codes: C32 E31 F31 F41 (search for similar items in EconPapers)
Date: 2002
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ris:integr:0207

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