Real Exchange Rates in Developing Countries: Are Balassa-Samuelson Effects Present?
By Ehsan U. Choudhri, Mohsin S. Khan. International Monetary Fund Staff Papers, 2004
119 citations recorded by the source corpus.
There is surprisingly little empirical research on whether Balassa-Samuelson effects can explain the long-run behavior of real exchange rates in developing countries. This paper presents new evidence on this issue based on a panel-data sample of 16 developing countries. The paper finds that the traded-nontraded productivity differential is a significant determinant of the relative price of nontraded goods, and the relative price in turn exerts a significant effect on the real exchange rate. The terms of trade also influence the real exchange rate. These results provide strong verification of Balassa-Samuelson effects for developing countries
Subfields: Economics and Econometrics
View Paper: https://www.semanticscholar.org/paper/d01b2ed75733ed41689e52d7414be1e2793cfdbc
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In Economics and Econometrics
- Taline Koranchelian
- Jeffrey A. Frankel
- M. Goldstein
- Lutz Kilian
- Donghyeon Kim
- Alvaro Cuervo‐Cazurra
- Xiaoqing Zhou
- Jesse Schreger
Citations in the corpus
- The Equilibrium Real Exchange Rate in a Commodity Exporting Country: Algeria's Experience (2005, background): “Furthermore, Choudhri and Khan (2004) found strong evidence of Balassa-Samuelson effects in developing countries.”
- Monetary Policy in Emerging Markets (2010, background): “18 See Kravis and Lipsey (1988); De Gregorio, Giovannini, and Wolf (1994); and Choudhri and Khan (2005). 19 See Salter (1959), Swan (1963), and Corden (1994).”