Inventory investment and production in Europe: Is there a pattern?
AbstractThe paper investigates the nexus between inventory investment and the change in aggregate production for 29 European countries over the period 2000-2009. A special interest is taken in the “Great Recession” of 2008/09. For most countries, a fairly uniform pattern emerges. Inventory investment is positively correlated with changes in production and follows the latter with a time-lag of two to three quarters. Therefore, there is no evidence that inventory investment either drives or smoothes the business cycle. Very few countries – Austria, Greece, Spain, and Switzerland – diverge from the typical pattern. This might hint to problems with respect to data quality.
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Bibliographic InfoPaper provided by KOF Swiss Economic Institute, ETH Zurich in its series KOF Working papers with number 11-271.
Length: 25 pages
Date of creation: Feb 2011
Date of revision:
Inventory investment; production; business cycle; “Great Recession” in Europe;
Find related papers by JEL classification:
- E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Capital; Investment; Capacity
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- O52 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Europe
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-02-26 (All new papers)
- NEP-EEC-2011-02-26 (European Economics)
- NEP-EUR-2011-02-26 (Microeconomic European Issues)
- NEP-MAC-2011-02-26 (Macroeconomics)
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- Abrahamsen, Yngve & Hartwig, Jochen, 2011. "Inventory investment and production in Europe during the "Great Recession": Is there a pattern?," International Journal of Production Economics, Elsevier, vol. 132(2), pages 174-177, August.
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