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Inventories and asymmetric business cycle fluctuations in the UK: a structural approach


  • Marianne Sensier


This paper investigates the movement of manufacturing inventories and production over the business cycle to arrive at an asymmetric structural equilibrium-correction model. Initially cross-correlation coefficients and deepness and steepness tests for skewness are utilized to present descriptive statistics of the time series. Cointegration analysis is performed on each disaggregate inventory by stage of production (finished goods, work in progress and raw materials) with a set of explantory variables. Restricted cointegration vectors are added to the symmetric and non-symmetric specifications of the structural equilibrium-correction model. These are compared by parameter constancy tests and one-step ahead forecasts.

Suggested Citation

  • Marianne Sensier, 2003. "Inventories and asymmetric business cycle fluctuations in the UK: a structural approach," Applied Economics, Taylor & Francis Journals, vol. 35(4), pages 387-402.
  • Handle: RePEc:taf:applec:v:35:y:2003:i:4:p:387-402
    DOI: 10.1080/00036840210128735

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    References listed on IDEAS

    1. Alan S. Blinder, 1986. "Can the Production Smoothing Model of Inventory Behavior be Saved?," The Quarterly Journal of Economics, Oxford University Press, vol. 101(3), pages 431-453.
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    7. McQueen, Grant & Thorley, Steven, 1993. "Asymmetric business cycle turning points," Journal of Monetary Economics, Elsevier, vol. 31(3), pages 341-362, June.
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    17. Cogley, Timothy & Nason, James M., 1995. "Effects of the Hodrick-Prescott filter on trend and difference stationary time series Implications for business cycle research," Journal of Economic Dynamics and Control, Elsevier, vol. 19(1-2), pages 253-278.
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    Cited by:

    1. Almeida, Pedro Cameira de & Fuinhas, José Alberto & Marques, António Cardoso, 2011. "A assimetria dos ciclos económicos: Evidência internacional usando o teste triples
      [The asymmetry of business cycles: International evidence using triples test]
      ," MPRA Paper 35208, University Library of Munich, Germany.
    2. Oleg Korenok & Bruce Mizrach & Stan Radchenko, 2004. "The Microeconomics of Macroeconomic Asymmetries: Sectoral Driving Forces and Firm Level Characteristics," Departmental Working Papers 200405, Rutgers University, Department of Economics.
    3. Barrera, Carlos R., 2011. "Impacto amplificador del ajuste de inventarios ante choques de demanda según especificaciones flexibles," Working Papers 2011-009, Banco Central de Reserva del Perú.

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