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Inventories and the Business Cycle

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  • DARREN FLOOD
  • PHILIP LOWE

Abstract

This paper examines the relationship between the inventory cy and the business cycle using both macroeconomic and survey da It is argued that over the past decade and a half, the changes inventory management have reduced the amplitude of the inventc cycle. The paper also argues that the behaviour of inventories consistent with demand shocks being an important source of business cycle fluctuations.

Suggested Citation

  • Darren Flood & Philip Lowe, 1995. "Inventories and the Business Cycle," The Economic Record, The Economic Society of Australia, vol. 71(1), pages 27-39, March.
    • Handle: RePEc:bla:ecorec:v:71:y:1995:i:1:p:27-39
    DOI: 10.1111/j.1475-4932.1995.tb01869.x
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    References listed on IDEAS

    as
    1. Alan S. Blinder, 1986. "Can the Production Smoothing Model of Inventory Behavior be Saved?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 101(3), pages 431-453.
    2. Alan S. Blinder & Louis J. Maccini, 1991. "Taking Stock: A Critical Assessment of Recent Research on Inventories," Journal of Economic Perspectives, American Economic Association, vol. 5(1), pages 73-96, Winter.
    3. Blanchard, Olivier J, 1983. "The Production and Inventory Behavior of the American Automobile Industry," Journal of Political Economy, University of Chicago Press, vol. 91(3), pages 365-400, June.
    4. James A. Kahn, 1992. "Why is Production More Volatile than Sales? Theory and Evidence on the Stockout-Avoidance Motive for Inventory-Holding," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(2), pages 481-510.
    5. West, Kenneth D., 1990. "Evidence from seven countries on whether inventories smooth aggregate output," Engineering Costs and Production Economics, Elsevier, vol. 19(1-3), pages 85-90, May.
    6. Olivier Jean Blanchard & Stanley Fischer, 1989. "Lectures on Macroeconomics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262022834, December.
    7. Beason, Richard, 1993. "Tests of production smoothing in selected Japanese industries," Journal of Monetary Economics, Elsevier, vol. 31(3), pages 381-394, June.
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    Cited by:

    1. Colin Ellis, 2017. "Scenario-based stress tests: are they painful enough?," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 11(2), June.
    2. Bennett T. McCallum, 2000. "On signal extraction and non-certainty-equivalence in optimal monetary policy rules, comments," Proceedings, Federal Reserve Bank of San Francisco.

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