Can firms' location decisions counteract the Balassa-Samuelson effect?

• 成果类型: Article
• 署名作者: Mejean, Isabelle
• 署名单位: Institut Polytechnique de Paris; Ecole Polytechnique
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2008.06.006
• 发表日期: 2008
• 页码: 139-154
• 关键词: Long-run real exchange rate; Balassa-Samuelson effect; New Trade theory; Panel cointegration

摘要

This paper examines the determinants of relative prices in a model combining a Harrod-Balassa-Samuelson (HBS) mechanism and an endogenous location of traded good producers. Besides the standard HBS effect, asymmetric productivity improvements in the traded good sector push new firms to enter the market. This benefits local consumers who save on trade costs and exerts an upward pressure on relative wages. As a consequence, relative prices in the traded good sector either increase or fall in general equilibrium. In a panel cointegration framework, the wage effect is shown to dominate. This means the HBS effect is strengthened by the relocation of traded good producers. (C) 2008 Elsevier B.V. All rights reserved.