A country with 25% of the economy producing tradeables experiences a 10% increase in the productivity...

 

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A country with 25% of the economy producing tradeables experiences a 10% increase in the productivity of tradeables. What impact might you expect this to have on its real exchange rate? More generally what predictions does Balassa Samuelson make about the exchange rates of developing and fast-growing economies? A country with 25% of the economy producing tradeables experiences a 10% increase in the productivity of tradeables. What impact might you expect this to have on its real exchange rate? More generally what predictions does Balassa Samuelson make about the exchange rates of developing and fast-growing economies?

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Impact on Real Exchange Rate A country with 25 of its economy producing tradeables and a 10 increase in their productivity is likely to experience an ... View the full answer