{
  "title": "Aggregate Investment Expenditures on Tradable and Nontradable Goods",
  "publication": "IMF Working Papers, February 1, 2008",
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  "summary": "This paper shows that aggregate investment expenditure shares on tradable and nontradable goods are very similar across countries and regions. Furthermore, the two expenditure shares have remained close to constant over time, with the average expenditure share on nontradables varying between 0.54-0.",
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      "heading": "Summary and key findings",
      "content": "- Aggregate investment expenditure shares on tradable and nontradable goods are very similar across countries and regions.\n- The two expenditure shares have remained close to constant over time.\n- The average expenditure share on nontradables varied between 0.54-0.62 over the 1960-2004 period.\n- The relative price of nontradables correlates positively with income and exhibits large differences across space and time.\n- These empirical findings offer a new restriction for two-sector models of the aggregate economy."
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    {
      "heading": "Empirical evidence and statistics",
      "content": "- Average expenditure share on nontradables: 0.54-0.62 (1960-2004).\n- Time period analyzed (for the reported average): 1960-2004."
    },
    {
      "heading": "Interpretation and modeling implications",
      "content": "- The similarity and stability of expenditure shares across countries and over time suggest a parsimonious functional form for aggregating tradable and nontradable goods in investment.\n- Combined with the positive correlation between the relative price of nontradables and income, the paper’s findings suggest that tradable and nontradable goods in investment can be modeled using the Cobb-Douglas aggregator.\n- The reported empirical regularities provide a new restriction that two-sector aggregate models should satisfy.\n\n---\n\n Content in this bundle\n\n- wp0845\n  - wp0845 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - wp0845 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/31/aggregate-investment-expenditures-on-tradable-and-nontradable-goods-21651"
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    "Authors: Rudolfs Bems",
    "Published: February 1, 2008",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451869071.001",
    "Aggregate investment expenditure shares on tradable and nontradable goods are very similar across countries and regions.",
    "The two expenditure shares have remained close to constant over time.",
    "The average expenditure share on nontradables varied between 0.54-0.62 over the 1960-2004 period.",
    "The relative price of nontradables correlates positively with income and exhibits large differences across space and time.",
    "These empirical findings offer a new restriction for two-sector models of the aggregate economy.",
    "Average expenditure share on nontradables: 0.54-0.62 (1960-2004).",
    "Time period analyzed (for the reported average): 1960-2004.",
    "The similarity and stability of expenditure shares across countries and over time suggest a parsimonious functional form for aggregating tradable and nontradable goods in investment.",
    "Combined with the positive correlation between the relative price of nontradables and income, the paper’s findings suggest that tradable and nontradable goods in investment can be modeled using the Cobb-Douglas aggregator.",
    "The reported empirical regularities provide a new restriction that two-sector aggregate models should satisfy.",
    "**_wp0845**"
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