Testing the productivity bias hypothesis for Brazil

Abstract

Purpose-Productivity Bias Hypothesis (Balassa-Samuelson hypothesis) implies that currency appreciates in a relatively more productive country. The focus of this study is to test productivity bias hypothesis for Brazil by employin time series data over the period 1980-2018. Methodology-Time series data is analyzed by Autoregressive Distributed Lag (ARDL) method of cointegration. Findings-Stationarity of the variables are supported by Augmented Dickey Fuller (ADF) and Phillips Perron (PP) tests. F bounds test and error correction model suggest that variables are cointegrated. Conclusion-Empirical analysis does not support the evidence in favor of productivity bias hypothesis for Brazil over the selected period.

Veri̇mli̇li̇k Yanliliği Hi̇potezi̇ni̇n Gelecek 11 Ülkesi̇ İçi̇n İncelenmesi̇

“…Following Officer (1976), the link between real exchange rates and productivity differentials is given in Equation 6 by employing the same notation in Vural (2019).…”