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Beyond the Balassa-Samuelson effect in some new member states of the European Union

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Author Info
García-Solanes, José
Sancho-Portero, F. Israel
Torrejón-Flores, Fernando

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Abstract

This paper analyses the Balassa and Samuelson hypothesis in two groups of countries: six new member states (NMSs) of the EU and six old member states (OMSs) not affected by the transition problems. We find that in the NMS group, the model may be successfully enlarged with variables that account for both quality improvements in the tradable sector and increases in the demand for domestic tradable goods. In the OMS panel, the model fails because national markets of tradable goods remain segmented, probably due to political interests, imperfect competition and transportation costs.

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File URL: http://www.sciencedirect.com/science/article/B6W8Y-4R8MDMP-1/1/35bffd389cc11409f79d0185717fa3fc
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Publisher Info
Article provided by Elsevier in its journal Economic Systems.

Volume (Year): 32 (2008)
Issue (Month): 1 (March)
Pages: 17-32
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Handle: RePEc:eee:ecosys:v:32:y:2008:i:1:p:17-32

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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. García Solanes, José & Torrejón Flores, Fernando, 2008. "The Balassa-Samuelson Hypothesis in Developed Countries and Emerging Market Economies: Different Outcomes Explained," Economics Discussion Papers 2008-14, Kiel Institute for the World Economy. [Downloadable!]
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