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Aggregate Investment Expenditures on Tradable and Nontradable Goods, Rudolfs Bems

Label
Aggregate Investment Expenditures on Tradable and Nontradable Goods, Rudolfs Bems
Language
eng
Abstract
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
Bibliography note
Includes bibliographical references
resource.governmentPublication
international or intergovernmental publication
Literary Form
non fiction
Main title
Aggregate Investment Expenditures on Tradable and Nontradable Goods
Nature of contents
dictionaries
Responsibility statement
Rudolfs Bems
Series statement
IMF Working Papers
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 complementarityVI. An application to the growth literatureA. Two-sector model; B. Quantitative results; VII. Conclusions; References; Appendix I: Compatibility of national accounts and input-output table data; Appendix II: Two-sector model with tradables and nontradables; Solution of the model, when θ =1; Comparisons in common prices; Allowing for CES aggregation in consumption; Tables; 1: Summary of data sources; 2. Investment expenditures on the output of different sectors of economic activity, as a fraction of total expenditures, 1968-90...............3. Investment expenditures on the output of different sectors of economic activity, as a fraction Of total expenditures, USA, 1997....4. Investment expenditures on the output of different sectors of economic activity, as a fraction of total expenditures, 1998-2001; 5. Tradability of sectoral output for selected countries; 6. Summary of aggregate investment expenditures on nontradable goods, 1970-2000; 7. Summary statistics for investment expenditures on nontradable goods, OECD data; 8. Summary statistics for investment expenditures on nontradable goods, UN data9. Correlation between expenditure shares on nontradables, UN data10. Pooled time trends for sample countries with at least 30 annual observations; 11. Cross-section comparison of investment expenditures on nontradable goods, UN data, 1950-1997; 12. Cross-section comparison of investment expenditures on nontradable goods, PWT benchmark data; 13. Investment expenditure share on nontradable goods by region, PWT 1996 benchmark data; 14. Comparison of aggregate investment expenditure shares on construction in Burstein et al. (2004) and OECD national accounts data; Figures1. Investment expenditures share on nontradables in selected countries2. Investment expenditure share on nontradables when residential construction is excluded from investment, cross-section averages; 3. Investment expenditure share on nontradables for selected years; 4. Investment expenditure share on nontradables for selected regions; 5. Relative price of nontradables in investment, 1996-PWT benchmark data; 6. Relative price of nontradables in investment in selected countries; 7. Variation in investment rates under different model specifications
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