Wage Discrepancy Between Tradable and Non-Tradable Sectors and Real Exchange Rates in Japan: Empirical Evidence with Panel Threshold Model

Le résumé fourni par la source

The Balassa-Samuelson hypothesis incorporates two assumptions: PPP and identical wages between tradable and non-tradable sectors. This study focuses on the latter assumption, the validity of which is hardly verified by previous research. Using panel data, we investigate whether the Balassa-Samuelson effect based on the real exchange rate by sectors in Japan and the United States changes depending on the relative wage ratio of manufacturing sectors to non-tradable sector. Based on Hansen's(1999) panel threshold regression model, we show that the wage discrepancy between tradable and non-tradable sectors in Japan is the important factor that changed the trend of real exchange rate in the mid 90's.

Ce résumé expose les affirmations des auteurs. BNTIC ne l’interprète pas comme une validation indépendante des résultats.