1. The Balassa–Samuelson Hypothesis in the Asia-Pacific Region Revisited.
- Author
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Thomas, Alastair and King, Alan
- Subjects
FOREIGN exchange rates ,FOREIGN exchange ,MONETARY policy ,ECONOMIC policy ,MONEY market - Abstract
In a study of nine Asia-Pacific countries' real exchange rates, Chinn (2000) finds some evidence in support of the Balassa (1964) and Samuelson (1964) hypothesis. His findings, however, are based on the application of a model containing several potentially restrictive simplifying assumptions to a dataset of limited span. Consequently, we look to assess the effect on Chinn's findings of considerably increasing the sample size and relaxing these assumptions. We find a comparable level of evidence for the Balassa–Samuelson hypothesis when applying Chinn's model to the larger sample, but obtain significantly greater support when a less restrictive approach is adopted. [ABSTRACT FROM AUTHOR]
- Published
- 2008
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