CAPITAL GOODS AND CONSUMER GOODS INDUSTRIES DURING THE BUSINESS CYCLE

Mihaela Ifrim ()

A chapter in EURINT Proceedings 2013, 2013, vol. 1, pp 595-603 from Centre for European Studies, Alexandru Ioan Cuza University

Abstract: An important feature of business cycles refers to the different behavior of capital goods prices compared to consumer goods prices. During economic expansion, the growing number of investment projects increases the prices of capital goods in a faster pace compared to the increase of consumer goods prices. At the same time, capital goods are more strongly affected by the crisis while consumer goods seem to have a somehow privileged position (major retailers continue to make profits from sales, even in periods of economic contraction). Finally, during recession, prices of capital goods are reduced in a faster pace than prices of consumer goods. In other words, capital goods prices are affected to a greater extent by monetary fluctuations, compared to consumer goods prices. This paper aims to highlight how monetary expansion from 2003-2007 produced distortions in the structure of production of the major economies - the United States and the European Union.

Keywords: relative prices; capital goods; consumer goods; structure of production (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://cse.uaic.ro/eurint/proceedings/index_htm_files/EURINT_2013.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:jes:euri13:595-603

Access Statistics for this chapter

More chapters in EURINT Proceedings from Centre for European Studies, Alexandru Ioan Cuza University Contact information at EDIRC.
Bibliographic data for series maintained by Alupului Ciprian ().