Inflation – Harrod-Balassa-Samuelson Effect in a DSGE Model Setting
This paper sets up a two-country two-sector dynamic stochastic general equilibrium model that introduces sector specific productivity shocks with quality improvement mechanism of goods. It provides a model-based theoretical background for the Harrod-Balassa-Samuelson phenomenon that describes the re...
| الحاوية / القاعدة: | Economic and Business Review |
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| المؤلف الرئيسي: | |
| التنسيق: | مقال |
| اللغة: | الإنجليزية |
| منشور في: |
University of Ljubljana
2019-10-01
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| الموضوعات: | |
| الوصول للمادة أونلاين: | https://www.ebrjournal.net/home/vol21/iss2/4 |
| الملخص: | This paper sets up a two-country two-sector dynamic stochastic general equilibrium model that introduces sector specific productivity shocks with quality improvement mechanism of goods. It provides a model-based theoretical background for the Harrod-Balassa-Samuelson phenomenon that describes the relationship between productivity and price inflation within different sectors in a particular economy. Both, the calibrated and the estimated model are able to show that the Harrod-Balassa-Samuelson effect is confirmed by inducing tradable sector productivity shocks as they drive the non-tradable sector price inflation higher than the tradable sector price inflation. By doing this, we overcome the problem that the tradable productivity increase in a typical open economy specification reduces the relative price of domestic tradable goods relative to the foreign ones. |
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| تدمد: | 1580-0466 2335-4216 |