Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

Using 1970-85 sectoral data for the OECD we find that inflation in nontradable good exceeds inflation in tradables. We identify a demand shift towards nontradables and faster growth of total factor productivity in the tradable goods sector as the prime causes of the differential inflation. In addition, disinflation attempts and the exchange rate regime appear to have exerted significant influence on the relative inflation rate.

Aggregate Factor Income Distribution --- Capacity --- Capital and Total Factor Productivity --- Cost --- Currency --- Deflation --- Economic Growth of Open Economies --- Exchange rate arrangements --- Expenditure --- Expenditures, Public --- Foreign Exchange --- Foreign exchange --- Income --- Industrial productivity --- Inflation --- Macroeconomics --- Macroeconomics: Production --- National accounts --- National Government Expenditures and Related Policies: General --- Open Economy Macroeconomics --- Price Level --- Prices --- Production and Operations Management --- Production --- Productivity --- Public finance & taxation --- Public Finance --- Total factor productivity --- Belgium

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

International finance

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

Recent moves towards greater monetary integration in Western Europe - and disintegration in Eastern Europe and the former Soviet Union - have rekindled interest in the theoretical and empirical aspects of optimal currency areas (OCA). In this paper, we examine the marginal benefit of increasing the number of currency unions within a given geographical area. We look at six regions; the United States, Europe, the G7, the CFA zone, the FSU and the world at large. Our results suggest that (i) contiguous monetary unions are typically dominated by non-contiguous unions; (ii) neither Europe nor the United States form an optimum currency area, for both regions the costs of adopting a single currency exceeds estimates of the transaction cost savings; (iii) Germany and the United States will almost never find it to their (economic) advantage to join monetary unions.

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

The paper examines the effects of terms of trade movements and productivity differentials across sectors on the behavior of the real exchange rate. We develop a simple model of a small open economy producing exportable and nontradable goods and consuming importable and nontradable goods and present empirical evidence for a sample of fourteen OECD countries. The evidence broadly supports the predictions of the model, namely that faster productivity growth in the tradable relative to the nontradable sector and an improvement in the terms of trade induce a real appreciation.