Investment Prices and Exchange Rates: Some Basic Facts

Sergio Rebelo (s-rebelo@kellogg.northwestern.edu), Joao C Neves and Ariel Burstein

No 4290, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This Paper documents four basic facts about investment goods and investment prices. First, investment has a very significant non-tradable 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.

Keywords: Construction; investment; Real exchange rate; Nominal exchange rate; Prices (search for similar items in EconPapers)
JEL-codes: F41 (search for similar items in EconPapers)
Date: 2004-03
New Economics Papers: this item is included in nep-ifn
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (68)

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