THE ROLE OF PRODUCTIVITY IN ECONOMIC GROWTH AND EQUILIBRIUM

Journal Title: Asian Economic and Financial Review - Year 2013, Vol 3, Issue 11

Abstract

This study reexamines the evidence for the Balassa-Samuelson effect for the 1985-2007 period. Cointegrating relationships between the real exchange rate and productivity, real price of oil and government spending are estimated using the Johansen and Stock-Watson procedures. The findings show that for each percentage point in the US-Euro area productivity differential there is a three percentage point change in the real dollar/euro valuation. These findings are robust to the estimation methodology, the variables included in the regression, and the sample period. We suggest that economic disequilibrium can result in a decline in economic growth. This study will utilize von Neumann’s “A Model of General Economic Equilibrium” as an economic equilibrium standard.

Authors and Affiliations

Ordean Olson| Economics Department Nova Southeastern University

Keywords

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  • EP ID EP1976
  • DOI -
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How To Cite

Ordean Olson (2013). THE ROLE OF PRODUCTIVITY IN ECONOMIC GROWTH AND EQUILIBRIUM. Asian Economic and Financial Review, 3(11), 1497-1527. https://europub.co.uk/articles/-A-1976