We model the real exchange rates between the US and 18 OECD countries by an innovative dynamic process called integral correction mechanism, and allow a real exchange rate equilibrium determined by Harrod-Balassa-Samuelson effects. The Harrod-Balassa-Samuelson effect works through a direct...

Suppose we have observations ranging over t=0,1,…T on real net investment, {I_{n,t}}₀^{T}, and on real gross investment, {I_{g,t}}₀^{T}. We derive a method of calculating the depreciation rate for each of the periods {δ_{t}}₁^{T}, and estimating `the' implied net capital stock...