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Evaluating the German Inventory Cycle – Using Data from the Ifo Business Survey

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  • Thomas A. Knetsch

Abstract

Inventory fluctuations are an important phenomenon in business cycles. However, the preliminary data on inventory investment as published in the German national accounts are tremendously prone to revision and therefore ill-equipped to diagnose the current stance of the inventory cycle. The Ifo business survey contains information on the assessments of inventory stocks in manufacturing as well as in retail and wholesale trade. Static factor analysis and a method building on canonical correlations are applied to construct a composite index of inventory fluctuations. Based on recursive estimates, the different variants are assessed as regards the stability of the weighting schemes and the ability to forecast the “true” inventory fluctuations better than the preliminary official releases.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2004/wp-cesifo-2004-05/cesifo1_wp1202.pdf
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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 1202.

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Date of creation: 2004
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Handle: RePEc:ces:ceswps:_1202

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Keywords: inventory investment; revisions; composite indices; canonical correlation; factor models; national accounts data; Ifo business survey; Germany;

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References

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  22. Knetsch, Thomas A., 2004. "The Inventory Cycle of the German Economy," Discussion Paper Series 1: Economic Studies 2004,09, Deutsche Bundesbank, Research Centre.
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Cited by:
  1. Sascha O. Becker & Klaus Wohlrabe, 2008. "European Data Watch: Micro Data at the Ifo Institute for Economic Research – The “Ifo Business Survey”, Usage and Access," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 128(2), pages 307-319.
  2. Klaus Abberger & Sascha O. Becker & Barbara Hofmann & Klaus Wohlrabe, 2007. "Mikrodaten im ifo Institut für Wirtschaftsforschung: Bestand, Verwendung, Zugang," Ifo Working Paper Series Ifo Working Paper No. 44, Ifo Institute for Economic Research at the University of Munich.
  3. Knetsch, Thomas A., 2004. "The Inventory Cycle of the German Economy," Discussion Paper Series 1: Economic Studies 2004,09, Deutsche Bundesbank, Research Centre.
  4. Klaus Abberger & Sascha Becker & Barbara Hofmann & Klaus Wohlrabe, 2007. "Mikrodaten im ifo Institut für Wirtschaftsforschung – Bestand, Verwendung und Zugang," AStA Wirtschafts- und Sozialstatistisches Archiv, Springer, vol. 1(1), pages 27-42, June.
  5. Sascha O. Becker & Klaus Wohlrabe, 2007. "Micro Data at the Ifo Institute for Economic Research – The “Ifo Business Survey”, Usage and Access," Ifo Working Paper Series Ifo Working Paper No. 47, Ifo Institute for Economic Research at the University of Munich.

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