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

WPIEA2005113 Image
Price:  $15.00

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

Languages and formats available



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