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This is exactly what economic theory would predict: countries with faster productivity growth in the traded-goods sector should see rising real exchange rates.
ECONOMIST: Currencies
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For example, if productivity falls, current returns decline, says the theory, so workers and firms choose to work less and take more leisure.
ECONOMIST: The causes of booms and busts
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This theory, which emerged in the early 1980s, sees productivity shocks as the cause of economic fluctuations.
ECONOMIST: The causes of booms and busts
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Economic theory suggests that wages depend a good deal on the productivity of a worker, with those workers who are more productive commanding higher wages.
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This is the basis of the Balassa-Samuelson theory which holds that average prices will be higher in countries with higher productivity (ie, high GDP per head), because higher wages will push up prices in labour-intensive goods and services.
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Rather than explaining the cycle in terms of market failure, as Keynes did, real business-cycle theory views a recession as the optimal response by households and firms to a shift in productivity.
ECONOMIST: The causes of booms and busts