Long abstract

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This paper covers two important topics resulting from the recent release of the OECD System of Unit Labour Cost and Related Indicators database. The first section of the paper explores differences between productivity measures produced in the Statistics Directorate. The OECD System of Unit Labour Cost and Related Indicators database was developed in response to concerns from the international community of economic analysts on the limited availability of internationally comparable data concerning labour costs, particularly in activities outside of Manufacturing and on a sub-annual basis. Released in mid-2007 this database has a full range of competitiveness indicators surrounding unit labour costs. The second section of the paper examines a well know economic theory - the Balassa-Samuelson effect - using data from the OECD System of Unit Labour Cost and Related Indicators database. Two articles written independently by Bela Balassa (1964) and Paul A. Samuelson (1964) introduced the theory that relative prices and the appreciation of real exchange rates can be explained by higher productivity growth in sectors exposed to international competition than productivity growth in sectors sheltered from this competition.  The findings exposed in these two articles have become known as the Balassa-Samuelson effect.