We develop a general equilibrium model of an emerging market economy where productivity growth differentials between …

, incorporating sectoral productivity shocks and a labor market wedge. We construct a DSGE model to generate a cross section and time … eurozone data. Our findings contrast with previous studies that have found little relationship between productivity and real …

We investigate the link between real exchange rates and sectoral total factor productivity measures for countries in … previous studies that have found little relationship between productivity levels and the real exchange rate among high …

real exchange rate) between two countries is explained by the relative wage rate and the relative labor productivity … the relative labor productivity. Since the convergence of price levels in the long run is confirmed in this paper, the … to raise labor productivity which causes a rise in the nominal wage rate in the longer run and which eventually results …

, leading to a negative relationship between the productivity in the tradable sector and the real exchange rate. In a small open …. Non-tradable services are produced with low-skilled labor only. A rise in the productivity of capital has two effects: (1 … tradable sector is high; and (2) it increases the demand for non-tradables and its labor input. Overall demand for low …