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The Behavior of Nontradable‐Goods Prices In Europe: Evidence and Interpretation *
Author(s) -
Gregorio José,
Giovannini Alberto,
Krueger Thomas H.
Publication year - 1994
Publication title -
review of international economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.513
H-Index - 58
eISSN - 1467-9396
pISSN - 0965-7576
DOI - 10.1111/j.1467-9396.1994.tb00045.x
Subject(s) - economics , relative price , relevance (law) , wage , open economy , interpretation (philosophy) , intermediate good , macroeconomics , monetary economics , international economics , production (economics) , exchange rate , labour economics , political science , computer science , law , programming language
This paper examines the evolution of the relative price between tradable and nontradable goods in a group of European countries. A model of an open economy is used to analyze different factors that can account for an increase in the relative price of nontradable goods. These factors are (a) faster technological progress in the tradable goods sector, (b) demand shifts toward nontradable goods, and (c) real wage pressures. the relevance of these factors is analyzed empirically for France, Germany, Italy, Spain, and the United Kingdom.