Basu, Parantap; Thoenissen, Christoph - Centre for Dynamic Macroeconomic Analysis, University … - 2009
Is the relative price of investment goods a good proxy for investment frictions? We model this relative price in a … the relative price of investment goods breaks down in an international economy because of the short run correlation … between the terms of trade and the relative price of investment goods. The data congruent negative correlation between the …