Can we identify the relative price between consumption and investment?
AbstractThis paper considers various AK models to investigate inference about the relative price between consumption and investment using NIPA data. We find, that depending on the model used, we can legitimately generate different time series for this price. If we successfully construct a falling price of investment, the model implies an inadmissibly low share of consumption in output. If we use an admissible share of consumption we generate investment prices which increase over time, contrary to the intuition generated by the price of equipment goods.
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Bibliographic InfoPaper provided by University of Essex, Department of Economics in its series Economics Discussion Papers with number 615.
Date of creation: 10 Aug 2006
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Postal: Discussion Papers Administrator, Department of Economics, University of Essex, Wivenhoe Park, Colchester CO4 3SQ, U.K.
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