In this paper, we investigate whether the Balassa-Samuelson (B-S) effect holds for the Czech Republic, Hungary, Poland …, Slovakia and Slovenia during the transition process. The co-integration analysis suggests that the importance of the B-S effect … does differ across countries. Generally, we can establish long-term co-integration relationships between productivity …

Republic, Hungary, Poland, Slovakia and Slovenia - and the euro area in terms of differences in productivity growth between … productivity differentials explain on average only between 0.2 and 2.0 percentage points of annual inflation differentials vis …-a-vis the euro area. Productivity differentials also explain only a small proportion of domestic inflation in central European …