TESTING THE PRODUCTIVITY BIAS HYPOTHESIS FOR BRAZIL

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Vural G.

8. İstanbul Finans Kongresi, İstanbul, Turkey, 01 November 2019, vol.10, pp.68-71

• Publication Type: Conference Paper / Full Text
• Volume: 10
• Doi Number: 10.17261/pressacademia.2019.1145
• City: İstanbul
• Country: Turkey
• Page Numbers: pp.68-71

Abstract

ABSTRACT
Purpose- Productivity Bias Hypothesis (Balassa-Samuelson hypothesis) implies that currency appreciates in a relatively more productive
country. The focus of this study is to test productivity bias hypothesis for Brazil by employin time series data over the period 1980-2018.
Methodology- Time series data is analyzed by Autoregressive Distributed Lag (ARDL) method of cointegration.
Findings-Stationarity of the variables are supported by Augmented Dickey Fuller (ADF) and Phillips Perron (PP) tests. F bounds test and error
correction model suggest that variables are cointegrated.
Conclusion- Empirical analysis does not support the evidence in favor of productivity bias hypothesis for Brazil over the selected period.
Keywords: Productivity bias hypothesis, Brazil.