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Input and output inventories

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Author Info

  • Humphreys, Brad R.
  • Maccini, Louis J.
  • Schuh, Scott

Abstract

This paper presents a new stage-of-fabrication inventory model with ordering usage and stocking of input materials under gross production or value added technology The model extends the traditional linear-quadratic model of output (finished goods) inventories and yields joint decision rules for input and output inventories with extensive dynamic stage-of-fabrication linkages Data show that input inventories are more important than output inventories in business cycle fluctuations Maximum likelihood estimation is relatively successful for a structural inventory model in nondurable and durable good industries The results include evidence of convex costs input-inventory-saving technology and insensitivity to production technology specification

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Monetary Economics.

Volume (Year): 47 (2001)
Issue (Month): 2 (April)
Pages: 347-375

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Handle: RePEc:eee:moneco:v:47:y:2001:i:2:p:347-375

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Web page: http://www.elsevier.com/locate/inca/505566

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References

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