A Model of Inventory and Layoff Behaviour under Uncertainty
AbstractThis paper develops a model of firm behavior under uncertainty designed to study the interac tion of inventories and layoffs. The model is a blend of a buffer sto ck model of inventory behavior and an implicit contract model of layo ffs. The model creates a distinction between inventory-biased and lay off-biased firms, each of which exhibits inherently different pattern s of response of inventories and temporary layoffs to demand shocks. In addition, the model implies that the inventory-layoff interaction tends to strengthen (weaken) the response of price and the work force to changes in anticipated demand (real interest rates). Copyright 1988 by Royal Economic Society.
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Bibliographic InfoArticle provided by Royal Economic Society in its journal The Economic Journal.
Volume (Year): 98 (1988)
Issue (Month): 392 (September)
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Other versions of this item:
- John Haltiwanger & Louis Maccini, 1984. "A Model of Inventory and Layoff Behavior Under Uncertainty," UCLA Economics Working Papers 321, UCLA Department of Economics.
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- Adam Copeland & George Hall, 2011.
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- Alan S. Blinder & Louis J. Maccini, 1990.
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- Blinder, Alan S & Maccini, Louis J, 1991. " The Resurgence of Inventory Research: What Have We Learned?," Journal of Economic Surveys, Wiley Blackwell, vol. 5(4), pages 291-328.
- Charles A. Fleischman, 1996. "The endogeneity of employment adjustment costs: the tradeoff between efficiency and flexibility," Finance and Economics Discussion Series 1996-48, Board of Governors of the Federal Reserve System (U.S.).
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