ABSTRACT
Chapter 13 tries to achieve three goals: (1) to improve the basic Balassa-Samuelson framework used in cross-section estimates, by relaxing some extreme assumptions; (2) to use the model further and estimate the overvaluation and undervaluation of currencies of specific countries; and (3) to engage in a debate on the linkage between high unemployment in Europe and undervaluation in Asian emerging countries. In my opinion, I think the authors fulfil the first goal quite well but fail to achieve the second and the third goal of the chapter.
