European Parliament Library

Aggregate Investment Expenditures on Tradable and Nontradable Goods, Rudolfs Bems

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
Table Of Contents
Contents; I. Introduction; II. Structure of aggregate investment expenditures; A. Empirical evidence from input-output tables; B. Implications for tradables and nontradables; C. Alternative data sources; III. Investment expenditures on nontradables in national accounts; A. Time-series data; B. Cross-section data; IV. Compatibility with related empirical regularities in the literature; V. Implications for modeling choices; A. Models with aggregate capital stock; B. Models with tradable and nontradable capital; C. Models with capital-skill complementarity
Literary Form
non fiction
Description based upon print version of record
Physical Description
1 online resource (50 p.)
Specific Material Designation
Form Of Item

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