Revealed comparative advantage: Extensions

One problem with the basic Balassa index is that it is not symmetrically distributed around the neutral value 1.0, ranging from0 to 1 for comparative disadvantage. . .

Revealed comparative advantage: Practical Issues

Since its initial formulation, RCA indexes have been widely used to track specialization with regard to participation in the international economy.

Revealed comparative advantage: Origin and Mathematical Formulation

The index most commonly used to measure RCA is the Balassa index (BI), which was developed and popularized by Bela Balassa (1965, 1989). . .

Revealed comparative advantage

Revealed comparative advantage (RCA) is an empirical measure of the extent to which a given country specializes in the export of a particular product or range of products. . .

Real exchange rate: Measuring the Real Exchange Rate

Empirical work on real exchange rates involves many judgments about how to construct real exchange rate measures. 

Real exchange rate: Empirical Challenges

Despite much work, little is known about the empirical determinants of real exchange rates.

Real exchange rate: Theoretical Approaches

Most theoretical approaches to understanding real exchange rates focus on the price of goods.

Real exchange rate

The real exchange rate, a linchpin of international economics, tells us about the overall costs in one country compared with another.

Partial equilibrium models: Imperfect Substitutes Model

We next consider an imperfect substitutesmodel in the ‘‘large’’ country case, allowing for terms of trade effects. This model is presented in figure 2.

Partial equilibrium models: A Perfect Substitutes Model

We will first consider a perfect substitutes model with ‘‘second-best’’ effects in the ‘‘small’’ country case.

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