Investment Rate vs. Relative Price of Investment
AbstractIn this paper I accomplish a levels account exercise across countries in order to calculate contributions from differences in the relative price of investment and the investment rate to differences in the physical capital-output ratio -and consequently in output per worker- across countries. I find that differences in the relative price of investment account for most differences in the physical capital-output ratio across countries and consequently, if capital share is broadly consistent with national income accounts data, they have a moderate importance in accounting for differences in output per worker. However, differences in the investment rate account for very little disparity in physical capital-output ration and output per worker across countries.
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Bibliographic InfoPaper provided by IDEGA - Instituto Universitario de Estudios e Desenvolvemento de Galicia in its series Documentos de trabajo - Analise Economica with number 0028.
Length: 26 pages
Date of creation: 2003
Date of revision:
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Physical capital-output ratio; output per worker; investment rate; relative price of investment;
Find related papers by JEL classification:
- E23 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Production
- O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
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