How Do Firms React to Surprising Changes to Demand? A Vector Autoregressive Analysis Using Business Survey Data
AbstractThe way in which economic agents respond to unexpected changes to demand is a central issue in contemporary business cycle theories. Although several empirical papers have used macro data to evaluate this issue there are very few results available that have used direct measures of expectation errors from micro panel data. This paper uses micro panel data from a New Zealand quarterly tendency survey to derive expectation errors for nine variables over an unusually long period of 24 years. A vector-autoregressive model is estimated and used to simulate the dynamic reaction of manufacturers to surprising changes to demand. Unexpected changes to demand are important in explaining unplanned changes in output, inventories, employment and labor turnover. Selling price and cost expectation errors are not particularly sensitive to surprising changes to demand. Copyright 1991 by Blackwell Publishing Ltd
Download InfoTo our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Bibliographic InfoArticle provided by Department of Economics, University of Oxford in its journal Oxford Bulletin of Economics & Statistics.
Volume (Year): 53 (1991)
Issue (Month): 4 (November)
Contact details of provider:
Postal: Manor Rd. Building, Oxford, OX1 3UQ
Web page: http://www.blackwellpublishing.com/journal.asp?ref=0305-9049
More information through EDIRC
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- David Law & Bob Buckle & Dean Hyslop, 2006. "Toward a Model of Firm Productivity Dynamics," Treasury Working Paper Series 06/11, New Zealand Treasury.
- Brian Silverstone, 2000. "Respondent Dynamics within the NZIER Survey of Business Opinion: An Introductory Perspective," Working Papers in Economics 00/03, University of Waikato, Department of Economics.
- Ehrmann, Michael, 2000.
"Firm size and monetary policy transmission: evidence from German business survey data,"
Working Paper Series
0021, European Central Bank.
- Ehrmann, M., 2000. "Firm Size and Monetary Policy Transmission - Evidence from German Business Survey Data," Economics Working Papers eco2000/12, European University Institute.
- Michael Ehrmann, 2004. "Firm Size and Monetary Policy Transmission – Evidence from German Business Survey Data," CESifo Working Paper Series 1201, CESifo Group Munich.
- Ciaran Driver & Fabrice Goffinet, 1998. "Investment under Demand Uncertainty, Ex-Ante Pricing, and Oligopoly," Review of Industrial Organization, Springer, vol. 13(4), pages 409-423, August.
- Richard De Abreu Lourenco & Philip Lowe, 1994. "Demand Shocks, Inflation and the Business Cycle," RBA Research Discussion Papers rdp9411, Reserve Bank of Australia.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.