00000nam 2200000za 4500 9.802825 CaOODSP 20221107135053 cr ||||||||||| 150810s2015 onc o f000 0 eng d CaOODSP eng eng fre n-cn--- FB3-2/115-30E-PDF Wagner, Joel. The endogenous relative price of investment [electronic resource] / by Joel Wagner. Ottawa : Bank of Canada, 2015. iv, 41 p. : fig., graphs, tables. Bank of Canada working paper, 1701-9397 ; 2015-30 "July 2015." Includes bibliographical references. This paper takes a full-information model-based approach to evaluate the link between investment-specific technology and the inverse of the relative price of investment. The two-sector model presented includes monopolistic competition where firms can vary the markup charged on their product depending on the number of firms competing. With these changes to the standard two-sector model, both total factor productivity as well as a series of non-technological shocks can impact the high-frequency volatility of the relative price of investment. Utilizing a Bayesian estimation approach to match the model to the data, we find that investment-specific technology can explain at most half of the growth rate of the relative price of investment. Last of all, we compare the benchmark model results with endogenous movement in the relative price of investment to a model where all movement in the relative price of investment is derived exogenously. gccst Investments gccst Prices gccst Technological innovation gccst Economic analysis Bank of Canada. Working paper (Bank of Canada) 1701-9397 ; 2015-30 (CaOODSP)9.504604 PDF 475 KB https://publications.gc.ca/collections/collection_2015/banque-bank-canada/FB3-2-115-30-eng.pdf