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.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
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
Date of revision:
Postal: Discussion Papers Administrator, Department of Economics, University of Essex, Wivenhoe Park, Colchester CO4 3SQ, U.K.
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Ana Balcao Reis & Joao Ejarque, 2005. "(Relative Price) Lessons from Taking an AK Model to the Data," 2005 Meeting Papers 312, Society for Economic Dynamics.
- Whelan, Karl, 2003.
" A Two-Sector Approach to Modeling U.S. NIPA Data,"
Journal of Money, Credit and Banking,
Blackwell Publishing, vol. 35(4), pages 627-56, August.
- Andreas Hornstein & Jack Praschnik, 1997.
"Intermediate inputs and sectoral comovement in the business cycle,"
97-06, Federal Reserve Bank of Richmond.
- Hornstein, Andreas & Praschnik, Jack, 1997. "Intermediate inputs and sectoral comovement in the business cycle," Journal of Monetary Economics, Elsevier, vol. 40(3), pages 573-595, December.
- Gregory W. Huffman & Mark A. Wynne, 1995.
"The role of intratemporal adjustment costs in a multi-sector economy,"
9508, Federal Reserve Bank of Dallas.
- Huffman, Gregory W. & Wynne, Mark A., 1999. "The role of intratemporal adjustment costs in a multisector economy," Journal of Monetary Economics, Elsevier, vol. 43(2), pages 317-350, April.
- Fisher,Franklin M. & Shell,Karl, 1998. "Economic Analysis of Production Price Indexes," Cambridge Books, Cambridge University Press, number 9780521556231, December.
- Rebelo, Sergio, 1991.
"Long-Run Policy Analysis and Long-Run Growth,"
Journal of Political Economy,
University of Chicago Press, vol. 99(3), pages 500-521, June.
- Felbermayr Gabriel J & Licandro Omar, 2005.
"The Underestimated Virtues of the Two-sector AK Model,"
The B.E. Journal of Macroeconomics,
De Gruyter, vol. 5(1), pages 1-19, September.
- Gabriel J. FELBERMAYR & Omar LICANDRO, 2002. "The Under-Estimated Virtues of the Two-Sector AK Model," Economics Working Papers ECO2002/27, European University Institute.
- Gabriel Felbermayr & Omar Licandro, 2003. "The underestimated virtues of the two-sector AK model," Economics working papers 2003-15, Department of Economics, Johannes Kepler University Linz, Austria.
- Jones, Charles I, 1995. "Time Series Tests of Endogenous Growth Models," The Quarterly Journal of Economics, MIT Press, vol. 110(2), pages 495-525, May.
- João Ejarque & Ana Balcão Reis, 2003. "More Lessons from Taking an AK Model to the Data," Discussion Papers 03-37, University of Copenhagen. Department of Economics.
- Fatas, Antonio, 2000.
"Endogenous growth and stochastic trends,"
Journal of Monetary Economics,
Elsevier, vol. 45(1), pages 107-128, February.
- Karl Whelan, 2000. "A guide to the use of chain aggregated NIPA data," Finance and Economics Discussion Series 2000-35, Board of Governors of the Federal Reserve System (U.S.).
- Ingram, Beth Fisher & Kocherlakota, Narayana R. & Savin, N. E., 1994.
"Explaining business cycles: A multiple-shock approach,"
Journal of Monetary Economics,
Elsevier, vol. 34(3), pages 415-428, December.
- Ingram, B.F. & Kocherlakota, N.R. & Savin, N.E., 1992. "Explaining Business Cycles : A Multiple Shock Approach," Working Papers 92-09, University of Iowa, Department of Economics.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Essex Economics Web Manager).
If references are entirely missing, you can add them using this form.