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Seasonal production smoothing

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  • Donald S. Allen

Abstract

Empirical tests of the production-smoothing hypothesis have yielded mixed results. In this paper, Donald Allen looks for and finds evidence of seasonal production smoothing in 15 out of 25 manufacturing series and eight out of 10 retail series, using detrended seasonally unadjusted data. The equivalent test using seasonally adjusted data were negative for all 35 series. The results suggest that seasonally adjusted data obscure short-term production smoothing.

Suggested Citation

  • Donald S. Allen, 1999. "Seasonal production smoothing," Review, Federal Reserve Bank of St. Louis, vol. 81(Sep), pages 21-40.
    • Handle: RePEc:fip:fedlrv:y:1999:i:sep:p:21-40:n:v.81no.5
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    References listed on IDEAS

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    1. Fair, Ray C., 1989. "The production-smoothing model is alive and well," Journal of Monetary Economics, Elsevier, vol. 24(3), pages 353-370, November.
    2. Allen, Donald S., 1997. "A multi-sector inventory model," Journal of Economic Behavior & Organization, Elsevier, vol. 32(1), pages 55-87, January.
    3. Dimelis, Sophia P. & Ghali, Moheb A., 1994. "Classical and variance bounds tests of the production smoothing hypothesis," International Journal of Production Economics, Elsevier, vol. 35(1-3), pages 15-22, June.
    4. Carpenter, Robert E & Levy, Daniel, 1998. "Seasonal Cycles, Business Cycles, and the Comovement of Inventory Investment and Output," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 30(3), pages 331-346, August.
    5. Alan S. Blinder, 1981. "Retail Inventory Behavior and Business Fluctuations," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 12(2), pages 443-520.
    6. 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. Mollick, Andre Varella, 2004. "Production smoothing in the Japanese vehicle industry," International Journal of Production Economics, Elsevier, vol. 91(1), pages 63-74, September.
    2. Wang, Xun & Disney, Stephen M., 2016. "The bullwhip effect: Progress, trends and directions," European Journal of Operational Research, Elsevier, vol. 250(3), pages 691-701.

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