Rogerson, Richard; Valentinyi, Akos; Herrendorf, Berthold - Society for Economic Dynamics - SED - 2007
We illustrate the usefulness of our approach by applying it to the so called Balassa-Samuelson effect, that is, in a cross sectional sense, countries with higher ppp adjusted incomes tend to have higher aggregate price levels (in a common numeraire). We show that as the US economy develops, its...
