The Production Smoothing Model Is Alive and Well
Monthly data in physical units for seven industries are used to examine the production smoothing hypothesis. The results strongly support this hypothesis. Significant effects of expected future sales on current production are found for four industries, and the estimated decision equations for all seven industries imply production smoothing behavior. The previous negative results regarding the hypothesis appear to be due to the use of poor data, particularly the shipments and inventory data of the Department of Commerce.
|Date of creation:||Feb 1989|
|Date of revision:|
|Publication status:||Published in Journal of Monetary Economics (1989), 24: 353-370|
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|Order Information:|| Postal: Cowles Foundation, Yale University, Box 208281, New Haven, CT 06520-8281 USA|
References listed on IDEAS
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"Seasonality, Cost Shocks and the Production Smoothing Model of Inventories,"
Rodney L. White Center for Financial Research Working Papers
1-87, Wharton School Rodney L. White Center for Financial Research.
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- Jeffrey A. Miron & Stephen P. Zeldes, . "Seasonality, Cost Shocks and the Production Smoothing Model of Inventories," Rodney L. White Center for Financial Research Working Papers 01-87, Wharton School Rodney L. White Center for Financial Research.
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NBER Working Papers
0891, National Bureau of Economic Research, Inc.
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- Hayashi, Fumio & Sims, Christopher A, 1983. "Nearly Efficient Estimation of Time Series Models with Predetermined, but Not Exogenous, Instruments," Econometrica, Econometric Society, vol. 51(3), pages 783-98, May.
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- Kenneth D. West, 1985.
"A Variance Bounds Test of the Linear Quardractic Inventory Model,"
NBER Working Papers
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- West, Kenneth D, 1986. "A Variance Bounds Test of the Linear Quadratic Inventory Model," Journal of Political Economy, University of Chicago Press, vol. 94(2), pages 374-401, April.
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