A Model of Inventory and Layoff Behavior 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 InfoPaper provided by UCLA Department of Economics in its series UCLA Economics Working Papers with number 321.
Date of creation: 01 Jan 1984
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Web page: http://www.econ.ucla.edu/
Other versions of this item:
- Haltiwanger, John C & Maccini, Louis J, 1988. "A Model of Inventory and Layoff Behaviour under Uncertainty," Economic Journal, Royal Economic Society, vol. 98(392), pages 731-45, September.
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- Adam Copeland & George Hall, 2006.
"The Response of Prices, Sales, and Output to Temporary Changes in Demand,"
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- Adam Copeland & George Hall, 2011. "The response of prices, sales, and output to temporary changes in demand," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 26(2), pages 232-269, March.
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- Darby, Michael R & Haltiwanger, John C & Plant, Mark W, 1985.
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- Michael R. Darby & John Haltiwanger & Mark Plant, 1984. "Unemployment-Rate Dynamics and Persistent Unemployment Under RAtional Expectations," UCLA Economics Working Papers 339, UCLA Department of Economics.
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- Yi Wen, 2008. "Inventories, liquidity, and the macroeconomy," Working Papers 2008-045, Federal Reserve Bank of St. Louis.
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