The Balassa-Samuelson Hypothesis in Developed Countries and Emerging Market Economies: Different Outcomes Explained

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in Abstract:This paper studies the Balassa-Samuelson hypothesis in two areas with strong differences in economic development, sixteen OECD countries and sixteen Latin American economies. Applying panel cointegration and bootstrapping techniques that solve for cross-sectional dependence problems in the data, we find that the second stage of the hypothesis, which relates relative sector prices with the real exchange rate, only holds in the Latin American area. The failure of the latter in the OECD countries as a whole is reflected in departures from PPP in the tradable sectors, and is probably due to segmentation between national tradable markets.Paper submitted to the special issue "Using Econometrics for Assessing Economic Models" edited by Katarina Juselius. JEL: E31, F31, C15 SUMMARYIn this paper we test the BS effect by looking at two areas differing substantially in development and

Economic Growth Implications of Inflation Targeting and Inflation Volatility: An Emerging Economy’s Perspective

“…Abo-Zaid and Tuzemen [41] equally found a positive relationship between inflation targeting and economic growth rate for both emerging and developed countries that have adopted inflation targeting as a monetary policy framework. Similar positive effect was found in the following studies, Garcia-Solanes and Torrejon-Flores [42]; Ball and Sheridan [43]; Mishkin [44], Corbo et al [18], Neumann and Von Hagen [19] and Truman [12]. The findings of the current study were however contrary to the findings of Epstein and Yeldan [11], where average annual GDP growth rate in Brazil was found to be lower under inflation targeting than the exchange rate targeting regime by .…”