Author： Hsieh Chang-Tai Klenow Peter J.
Publisher： American Economic Association
ISSN： 0002-8282
Source： The American Economic Review, Vol.97, Iss.3, 2007-06, pp. : 562-585
Disclaimer: Any content in publications that violate the sovereignty, the constitution or regulations of the PRC is not accepted or approved by CNPIEC.
Abstract
The positive correlation between real investment rates and real income levels across countries is driven largely by differences in the price of investment relative to output. The high relative price of investment in poor countries is due to the low price of consumption goods in those countries. Investment prices are no higher in poor countries. Thus, the low real investment rates in poor countries are not driven by high tax or tariff rates on investment. Poor countries, instead, appear to be plagued by low efficiency in producing investment goods and in producing consumer goods to trade for them.
Related content
Relative Prices and Inflation Stabilization
THE JAPANESE ECONOMIC REVIEW, Vol. 66, Iss. 1, 2015-03 ,pp. :
Access to resources
Recommend
Money and the dispersion of relative prices revisited
By Belton Willie J. Cebula Richard J. Nair-Reichert Usha
Applied Economics, Vol. 34, Iss. 14, 2002-09 ,pp. :
Relative prices and expenditure switching effect
By Chen Shikuan Chang Ming-Jen
Applied Economics, Vol. 38, Iss. 17, 2006-09 ,pp. :
Imaginary money against sticky relative prices
By Loyo E.
European Economic Review, Vol. 46, Iss. 6, 2002-06 ,pp. :