These phenomena have strong implications for economics, both theoretically and empirically. Not only has the use of NTs changed the processes of production and exchange of goods; but the use of social networks has also transformed socio-economic relationships. Nowadays, electronic commerce represents an increasing proportion of transactions, and the adoption of NTs has extended the global market of the services sector. Consequently, the traditional division between tradable and not-tradable goods has really been changed.
Following this argument, one of the most analysed issues of international trade is the Balassa-Samuelson effect (BSe). The BSe explains international price differentials in terms of differences in labour productivity dynamics among sectors. One of the reasons we find differences in productivity is the level of incorporated technology in the production processes of tradable and non-tradable goods. NTs make labour productivity higher, and therefore countries that are more intensive in the production of tradable goods are richer. In general, if a country experiences a higher productivity growth than that of other countries, its real exchange rate tends to appreciate, having an impact on competitiveness.
But in a monetary union, the price competitiveness is given by inflation differentials. To what extent are those price differentials due to differences in productivity? What is the role played by NTs in productivity gains? Should the BSe be revisited in the light of NTs?
In this paper we intend to explore the way in which the adoption of NTs can influence productivity, price differentials and, therefore, competitiveness. To that end, we will briefly survey the explanatory theories on productivity and price differentials, as well as the empirical contributions on these issues. Finally, we will illustrate the effects of the use of NTs in Eurozone countries, using data provided by Eurostat. We will focus on the two main ways through which NTs could contribute to improve labour productivity: the spillovers coming from expenditure on research and development (R&D), and the education and training of workers using the advantages of NTs.
Key words: New Technologies, price differentials, monetary unions.
JEL codes: F12, F41, O33.