Weicheng Lian, Natalija Novta, Evgenia Pugacheva, Yannick Timmer, Petia Topalova, 07 June 2019

The dramatic decline in the relative price of capital goods has been an important – but overlooked – driver of real investment. This column analyses cross-country price data to establish that deepening trade integration and productivity growth have both contributed to this decline. The erosion of support for international trade and sluggish productivity growth may limit further declines in relative prices of capital goods, which could negatively affect real investment rates. 

Ricardo Reis, Mark Watson, 14 January 2008

Here is a discussion of work showing that constructed measures of ‘pure inflation’ differ markedly from standard measures. For example, pure inflation is uncorrelated with real output – just as neoclassical economics says it should be.

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