The Role of Productivity in the Czech Republic: Does Balassa-Samuelson Effect Still Exist?

Result code in IS VaVaI
<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F61989100%3A27510%2F16%3A86098095" target="_blank" >RIV/61989100:27510/16:86098095 - isvavai.cz</a>
Result on the web
—
DOI - Digital Object Identifier
—

Result language
angličtina
Original language name
The Role of Productivity in the Czech Republic: Does Balassa-Samuelson Effect Still Exist?
Original language description
The Purchasing Power Parity (PPP) theory claims that price level (or its changes in the case of relative version of PPP) is the only determinant of the development of exchange rate. Nevertheless, it does not provide good empirical results, especially in the case of transitive economies. One of possible explanation is the existence of Balassa-Samuelson (BS) effect. It is one of the theoretical approaches which try to explain the development of exchange rate and price level. It proposes that faster growth of productivity leads to appreciation of domestic currency and/or to growth of domestic price level. The aim of this paper is to assess the role of BS effect in the Czech Republic. Nevertheless, this approach includes some strong assumptions such as validity of PPP theory for tradeable goods or, in the case of the "domestic" BS effect, the assumption that wages tend to be equalized across tradable and non-tradable sectors. In this paper, the significance of BS effect is tested even if some of these conditions are not valid. We use quarterly data (2000 - 2015) in regression analysis. The Ordinary Least Squares (OLS) method is used to assess the influence of productivity on inflation rate.
Czech name
—
Czech description
—

Publication year
2016
Confidentiality
S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Article name in the collection
34th International Conference Mathematical Methods in Economics (MME) : proceedings papers
ISBN
978-80-7494-296-9
ISSN
—
e-ISSN
—
Number of pages
6
Pages from-to
1-6
Publisher name
Technická univerzita Liberec
Place of publication
Liberec
Event location
Liberec
Event date
Sep 6, 2016
Type of event by nationality
EUR - Evropská akce
UT code for WoS article
000385239500001

Similar results(10)