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Price smoothing and inventory adjustments

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  • Bhaskar Das

Abstract

The empirical results in this paper show a negative and statistically significant relationship between inventory variability and price variability, thereby lending support to the contention that inventory adjustments help to smooth price. The implication is that inventories assist in coordination of oligopolistic agreements.

Suggested Citation

  • Bhaskar Das, 1998. "Price smoothing and inventory adjustments," Applied Economics Letters, Taylor & Francis Journals, vol. 5(2), pages 117-119.
    • Handle: RePEc:taf:apeclt:v:5:y:1998:i:2:p:117-119
    DOI: 10.1080/758523516
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    References listed on IDEAS

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    1. Yakov Amihud & Haim Mendelson, 1983. "Price Smoothing and Inventory," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 50(1), pages 87-98.
    2. George J. Stigler & James K. Kindahl, 1970. "The Behavior of Industrial Prices," NBER Books, National Bureau of Economic Research, Inc, number stig70-1.
    3. Patricia B. Reagan, 1982. "Inventory and Price Behaviour," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 49(1), pages 137-142.
    4. Amihud, Yakov & Medenelson, Haim, 1989. "Inventory behaviour and market power: An empirical investigation," International Journal of Industrial Organization, Elsevier, vol. 7(2), pages 269-280, June.
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    Cited by:

    1. Martin Boileau & Marc-Andre Letendre, 2011. "Inventories, sticky prices, and the persistence of output and inflation," Applied Economics, Taylor & Francis Journals, vol. 43(10), pages 1161-1174.

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