Working Paper: NBER ID: w10238
Authors: Ariel Burstein; Joao C. Neves; Sergio Rebelo
Abstract: This paper documents four basic facts about investment goods and investment prices. First, investment has a very significant nontradable component in the form of construction services. Second, distributions services (wholesaling, retailing, and transportation) are much less important for investment than for consumption. Third, the import content of investment is much larger than that of consumption. Finally, in the aftermath of three large devaluations, the rate of exchange rate pass-through is, perhaps not surprisingly, highest for imported equipment and lowest for construction services.
Keywords: No keywords provided
JEL Codes: F41
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| exchange rate movements (F31) | investment prices (G19) |
| exchange rate movements (F31) | tradable investment goods prices (F16) |
| exchange rate movements (F31) | nontradable investment goods prices (F16) |
| tradable investment goods prices (F16) | construction prices (L74) |
| nontradable components in investment (E20) | re-evaluation of open economy models (F41) |