INVESTMENT PRICES AND EXCHANGE RATES: SOME BASIC FACTS | Zendy

Burstein Ariel T. | Zendy; Neves João C. | Zendy; Rebelo Sergio | Zendy

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INVESTMENT PRICES AND EXCHANGE RATES: SOME BASIC FACTS

Author(s) -

Burstein Ariel T.,

Neves João C.,

Rebelo Sergio

Publication year - 2004

Publication title -

journal of the european economic association

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 7.792

H-Index - 93

eISSN - 1542-4774

pISSN - 1542-4766

DOI - 10.1162/154247604323068005

Subject(s) - economics , monetary economics , investment (military) , exchange rate , international economics , politics , political science , law

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. (JEL: F41)

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