Those who ply their trade outside the bond market would be forgiven for thinking the Balassa-Samuelson effect was a medical condition. In fact, it is a measure of the health of nations, first devised by Hungarian strategist Béla Balassa and US economist Paul Samuelson in 1964.

The Balassa-Samuelson model says increased productivity leads to higher labour costs and, hence, higher prices in countries that are getting richer. This is not as much a statement of the blindingly obvious as it might first appear.