Labor Productivity and Real Exchange Rate: The Balassa-Samuelson Disconnect in the Former Yugoslav Republic of Macedonia

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Price:  $15.00

Author/Editor: Boileau Loko, Anita Tuladhar
Release Date: © June, 2005
ISBN : 978-1-45186-132-7
Stock #: WPIEA2005113
English
Stock Status: Available

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Description

This paper seeks to investigate the transmission mechanisms linking productivity to the real exchange rate in the former Yugoslav Republic of Macedonia. At first glance, the stylized facts-low labor productivity growth and a trend real depreciation-suggest that a Balassa- Samuelson effect is in play. We find that the relationship between the two is not a result of the traditional Balassa-Samuelson effect. Instead, the depreciation of the real exchange rate reflects mainly the behavior of prices in the tradable sector. We argue that the depreciating real exchange rate may reflect a prolonged transition associated with slow technological growth and the low quality of the country's tradable-goods basket.




More publications in this series: Working Papers


More publications by: Boileau Loko ; Anita Tuladhar