Labor Market Frictions and the Balassa-Samuelson Model
Mardi | 2011-04-12 B103 Romain RESTOUT – Olivier CARDI This paper addresses the role of labor market frictions in the transmission process of sectoral productivities shocks to the relative price of nontradables. The Balassa-Samuelson model based on frictionless labor markets predicts (i ) proportionality between relative prices and the cross-sectoralproductivity differential and (ii ) wage […]