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Investment Rate vs. Relative Price of Investment

Author

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  • Fernando del Rio

    (Universidade de Santiago de Compostela)

Abstract

In this paper I accomplish a levels account exercise across countries in order to calculate contributions from differences in the relative price of investment and the investment rate to differences in the physical capital-output ratio -and consequently in output per worker- across countries. I find that differences in the relative price of investment account for most differences in the physical capital-output ratio across countries and consequently, if capital share is broadly consistent with national income accounts data, they have a moderate importance in accounting for differences in output per worker. However, differences in the investment rate account for very little disparity in physical capital-output ration and output per worker across countries.

Suggested Citation

  • Fernando del Rio, 2003. "Investment Rate vs. Relative Price of Investment," Documentos de trabajo - Analise Economica 0028, IDEGA - Instituto Universitario de Estudios e Desenvolvemento de Galicia.
    • Handle: RePEc:edg:anecon:0028
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    More about this item

    Keywords

    Physical capital-output ratio; output per worker; investment rate; relative price of investment;
    All these keywords.

    JEL classification:

    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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