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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- Yi Wen, 2011.
"Input and Output Inventory Dynamics,"
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- Lucía Barcos & Alicia Barroso & Jordi Surroca & Josep A. Tribó, 2010.
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- John Haltiwanger, 1985. "Inventories, Multiperiod Implicit Contracts, and the Dynamic Behavior if the Firm Under Uncertainty," UCLA Economics Working Papers 374, UCLA Department of Economics.
- Yi Wen, 2008. "Inventories, liquidity, and the macroeconomy," Working Papers 2008-045, Federal Reserve Bank of St. Louis.
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