-2000 sample, the initial response of investment to a productivity shock with responses in the top quartile is 60% higher than the … shock. Conversely, a slowdown after a boom can lead to a long lasting investment slump, which is unresponsive to policy … smoothing in the investment response to aggregate shocks. The remaining 40% is explained by general equilibrium forces. The …

This paper studies the Balassa-Samuelson effect in 9 CEECs. Using panel cointegration techniques, we find strong … empirical evidence in favour of what we call the internal transmission mechanism since productivity growth in the open sector is …

This paper studies the Balassa-Samuelson effect in nine Central and East European countries. Using panel cointegration … techniques, we find that productivity growth in the open sector leads to inflation in non-tradable goods. Because of the low …