The Behavior of Nontradable Goods Prices in Europe: Evidence and Interpretation

62 Pages Posted: 15 Feb 2006

See all articles by Jose de Gregorio

Jose de Gregorio

Central Bank of Chile; Universidad de Chile; National Bureau of Economic Research (NBER)

Thomas M. Krueger

University of Wisconsin - La Crosse

Date Written: May 1993

Abstract

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.

JEL Classification: F3, F4

Suggested Citation

de Gregorio, Jose and Krueger, Thomas M., The Behavior of Nontradable Goods Prices in Europe: Evidence and Interpretation (May 1993). IMF Working Paper No. 93/45, Available at SSRN: https://ssrn.com/abstract=883504

Jose De Gregorio (Contact Author)

Central Bank of Chile ( email )

Agustinas 1180
Santiago
Chile

Universidad de Chile ( email )

Ministry of Finance Teatinos l20 - Piso l2
Santiago
Chile

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Thomas M. Krueger

University of Wisconsin - La Crosse ( email )

1725 State Street
La Crosse, WI 54601
United States

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