e Harrod Balassa Samuelson effect and the role of demand: international evidence from panel data
DOI:
https://doi.org/10.25097/rep.n32.2020.04Keywords:
Real exchange rate, Harrod-Balassa-Samuelson, demand, countries, panel dataAbstract
The study jointly analyzes the impact of labor productivity and demand factors in determining the real exchange rate. For this, the formalization of the Harrod-Balassa-Samuelson effect (HBS) is taken as a starting point, and the demand factors are analyzed from the point of view of government spending and per capita income. The empirical analysis is carried out for the period 1970-2010 using fixed-effect panel data regression models and the Generalized Moment Model (GMM) for a sample of 40 countries from different regions. The results provide evidence in favor of the HBS effect and the importance of demand factors in determining the real exchange rate. e results have important policy implications to help countries improve competitiveness.
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