The Balassa‐Samuelson Model: an Overview*

This paper introduces a special issue marking the thirtieth anniversary of the publication of two classic papers in international economics, Balassa (1964) and Samuelson (1964). We provide a brief analytical treatment of the basic model and an overview of the contributions in this special issue. the special issue includes novel empirical and theoretical approaches related to the Balassa‐Samuelson model. Theoretical models include dynamic two‐sector growth models, two‐country general‐equilibrium models, and openeconomy models with imperfectly competitive nontraded‐goods sectors. Several papers exploit new sources of data or datasets constructed in new ways from traditional sources. “Under the skin of any international economist lies a deep‐seated belief in some variant of the PPP theory of exchange rates.” (Rudiger Dornbusch and Paul Krugman, 1976, p. 540)