Aggregate investment expenditures on tradable and nontradable goods, Issues 2008-2045
International Monetary Fund, Research Dept., 2008 - Business & Economics - 48 pages
This paper shows that aggregate investment expenditure shares on tradable and nontradable goods are very similar across countries and regions. Furthermore, the two expenditure shares have remained close to constant over time, with the average expenditure share on nontradables varying between 0.54-0.62 over the 1960-2004 period. These empirical findings offer a new restriction for two-sector models of the aggregate economy. Combined with the fact that the relative price of nontradables correlates positively with income and exhibits large differences across space and time, our findings suggest that tradable and nontradable goods in investment can be modeled using the Cobb-Douglas aggregator.
What people are saying - Write a review
We haven't found any reviews in the usual places.
Investment expenditures on the output of different sectors of economic activity as a fraction
Other editions - View all
Aggregate Investment Expenditureson Tradable and Nontradable Goods
Limited preview - 2008
aggregate capital stock aggregate investment expenditures average expenditure share Burstein Cobb-Douglas coefficient comparison of investment confidence level construction sector country-year observations cross-section data sources Denmark design and related differences in investment distribution sector economic activity Economic Review elasticity of substitution empirical findings empirical regularities estate/business services sector Eurostat expenditures on nontradable Finland functional form Heston high income country Implications input-output table data investment expenditure shares Kehoe Krusell level of income literature national accounts data Netherlands non-OECD countries nontradable capital nontradables in consumption nontradables in investment OECD OECD countries OECD data percent of aggregate point estimates PPP adjusted price investment rate price of nontradables PWT 1996 benchmark Real est./bus real estate/business services regression related services relative price relative productivity Retail/wholesale trade role of tradables sample countries Section sectoral productivities sectors of economic share on nontradables share on tradables Slovenia SNA93 definitions standard error time-series tradables and nontradables trend two-sector models unitary elasticity