The main purpose of this thesis is to explore whether the Balassa-Samuelson hypothesis can effectively explain the long-term change of the real exchange. The recent panel unit root, panel cointegration tests and fully modified OLS are applied to examine the four tested equations that are based on the Balassa-Samuelson hypothesis. 1. Relative differential productivity between traded and non-traded sectors influences price differential in two sectors. 2. We extend the relative productivity in non-traded and traded sectors causing change in non-traded relative price into the two-country model. 3. The appreciation (depreciation) of the real exchange results from the different relative price of the two-country model. 4. The appreciation (depreciation) of the real exchange is caused by the different relative productivity of the two-country model. The data span is from 1971 to 1995, and includes 12 OECD countries. There are three main different points from the existing literatures. 1. We apply some newly developed panel unit root tests to estimate the equations based on Balassa-Samuelson hypothesis. 2. The previous documents only estimated the model of one variable, but the estimation of two variables was rare. In the equation 14 and 15, we examined the two variables in both. 3. In the calculation of the price, owing to the difficulties of collecting data from various sectors, we use a special way to measure the price. Finally, we can observe from the results of the empirical study: when productivity of the domestic sectors differentiates, that is, 1% increase in relative productivity between traded and non-trade sectors causes 0.53% increase in domestic relative prices. When it is taken into the two-country model, the increase of productivity will cause the appreciation of the real exchange rate. This can explain why in the developed countries like the U.S. and Japan, the faster increase in domestic relative productivity causes the appreciation of real exchange rates in the long run.

The main purpose of this thesis is to explore whether the Balassa-Samuelson hypothesis can effectively explain the long-term change of the real exchange. The recent panel unit root, panel cointegration tests and fully modified OLS are applied to examine the four tested equations that are based on the Balassa-Samuelson hypothesis. The data span is from 1985 to 2002, and includes 7 east asian countries. 1. Relative differential productivity between traded and non-traded sectors influences price differential in two sectors. 2. We extend the relative productivity in non-traded and traded sectors causing change in non-traded relative price into the two-country model. 3. The appreciation (depreciation) of the real exchange results from the different relative price of the two-country model. 4. The appreciation (depreciation) of the real exchange is caused by the different relative productivity of the two-country model. Finally, we can observe from the results of the empirical study: when productivity of the domestic sectors differentiates, that is, 1% increase in relative productivity between traded and non-trade sectors causes 0.28% increase in domestic relative prices. When it is taken into the two-country model, the increase of productivity will cause the appreciation of the real exchange rate.

Non-communicable disease (NCD) (particular by cardiovascular disease, CVD) is the leading cause of death in most countries including OECD countries. WHO (World Health Organization, 2002) has emphasized the trend of disease patterns shifting from communicable diseases towards to non-communicable diseases globally. However, globalization drives economic activities vigorously and alternates work conditions, such as prolonger or irregular working time, changing patterns of job. And then, more sweating, stress and occupational safety of labors after globalization were noted by many worldwide scholars. ¡§Karoshi¡¨ (death from overwork) is a controversial issue of occupational matters in these years all over the world. According to past empirical literatures, CVD was also the major medical cause of death from overwork. Hence, we collect panel data of CVD mortality, working hours of labor and KOF index of globalization covering 19 OECD countries from a period of 1980 to 2007, and measure by panel cointegration analysis and fully modified OLS (FMOLS) to estimate the reciprocal relationship among these variables. The evidence findings show significant influence on CVD mortality if increasing working hours of labor, especially at age groups of 15 to 24 year. While significant effect on CVD mortality through by globalization was found at age group 25 to 54 year and elders, particular in social globalization.