The decline in investment shares is not caused by falling relative prices of capital: a note
Secularly declining GDP investment shares are often explained by the widespread fall in the relative price of investment goods. Granger non-causality tests applied to longer-term time series for a large number of industrial countries tend to reject that explanation.
KeywordsRelative prices of capital Investment shares Secular stagnation Granger causality
JEL ClassificationE22 O11 C32
The author thanks two anonymous referees for helpful comments.
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