engleski

The analysis of domestic Balassa-Samuelson effect in Croatia: Evidence from long run model

The domestic Balassa-Samuelson effect in Croatia in long run is assessed in this paper. Previous research shows twofold results of Balassa- Samuelson effect estimation for Croatia. The Johansen cointegration analysis of relative productivity of tradable goods to nontradable goods sector and relative price of nontraded to traded goods is conducted, and the existence of one cointegration relation is estimated. Relative productivity is shown to have positive statistically significant impact on relative price in long run, what confirms domestic Balassa-Samuelson effect in Croatia.

Balassa-Samuelson effect, Johansen cointegration approach, relative productivity of tradable goods to nontradable goods sector, relative price of nontradable to tradable goods

This work has been partially supported by Croatian Science Foundation under the project STRENGTHS no 9402.