Investment prices and exchange rates: Some basic facts

Ariel T. Burstein, Sergio Rebelo, João C. Neves

Research output: Contribution to journalArticlepeer-review

17 Scopus citations

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.

Original languageEnglish (US)
Pages (from-to)302-309
Number of pages8
JournalJournal of the European Economic Association
Volume2
Issue number2-3
DOIs
StatePublished - 2004

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)

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