Recent Evidence on Improved Inventory Control: A quarterly Model of the US Economy for the period 1959-2001
This Paper aimed to re-test the hypothesis whether the improved inventory control affects the inventory investment or not. This paper used Bechter and Stanley (1992) model. The contribution of this letter has two dimensions; first, this paper extends the time horizon by using a quarterly data of the U.S. economy for the period 1959-2001. Also, it modifies Bechter and Stanley model under certain assumption and use the adjusted model to re-exam the hypothesis. The results of the paper support the idea that improved inventory control has a significant impact on the behavior of inventory investment. In addition, it shows that the improvement vary from one sector to another. Further, the paper showed that the speed of adjustment will be faster if the firms ignore holding inventories as a buffer stock.
Volume (Year): 1 (2004)
Issue (Month): 4 ()
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References listed on IDEAS
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- Terry J. Fitzgerald, 1997. "Inventories and the business cycle: an overview," Economic Review, Federal Reserve Bank of Cleveland, issue Q III, pages 11-22.
- Donald S. Allen, 1995. "Changes in inventory management and the business cycle," Review, Federal Reserve Bank of St. Louis, issue Jul, pages 17-26.
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- Christiano, Lawrence J., 1988. "Why does inventory investment fluctuate so much?," Journal of Monetary Economics, Elsevier, vol. 21(2-3), pages 247-280.
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