The Behavior of Nontradable Goods Prices in Europe: Evidence and Interpretation

Jose De Gregorio, Thomas Krueger and Alberto Giovannini

No 1993/045, IMF Working Papers from International Monetary Fund

Abstract: This paper examines the evolution of the relative price between tradable and nontradable goods in a group of European countries. A model of an open economy is used to analyze different factors that can account for an increase in the relative price of nontradable goods. These factors are: (a) faster technological progress in the tradable goods sector; (b) demand shifts toward nontradable goods; and (c) real wage pressures. The relevance of these factors is analyzed empirically for France, Germany, Italy, Spain and the United Kingdom.

Keywords: WP; exchange rate; real wage; price level; goods sector; nontradable goods; present discounted value; goods market imperfection; Real exchange rates; Real wages; Total factor productivity; Labor demand; Labor productivity; Europe (search for similar items in EconPapers)
Pages: 62
Date: 1993-05-01
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Citations: View citations in EconPapers (11)

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Related works:
Journal Article: The Behavior of Nontradable-Goods Prices in Europe: Evidence and Interpretation (1994)
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Persistent link: https://EconPapers.repec.org/RePEc:imf:imfwpa:1993/045

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