IDEAS home Printed from https://ideas.repec.org/a/bla/ecorec/v71y1995i1p27-39.html
   My bibliography  Save this article

Inventories and the Business Cycle

Author

Listed:
  • DARREN FLOOD
  • PHILIP LOWE

Abstract

This paper examines the relationship between the inventory cy and the business cycle using both macroeconomic and survey da It is argued that over the past decade and a half, the changes inventory management have reduced the amplitude of the inventc cycle. The paper also argues that the behaviour of inventories consistent with demand shocks being an important source of business cycle fluctuations.

Suggested Citation

  • Darren Flood & Philip Lowe, 1995. "Inventories and the Business Cycle," The Economic Record, The Economic Society of Australia, vol. 71(1), pages 27-39, March.
    • Handle: RePEc:bla:ecorec:v:71:y:1995:i:1:p:27-39
    DOI: 10.1111/j.1475-4932.1995.tb01869.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1475-4932.1995.tb01869.x
    Download Restriction: no
    File URL: https://libkey.io/10.1111/j.1475-4932.1995.tb01869.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Alan S. Blinder, 1986. "Can the Production Smoothing Model of Inventory Behavior be Saved?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 101(3), pages 431-453.
    2. Alan S. Blinder & Louis J. Maccini, 1991. "Taking Stock: A Critical Assessment of Recent Research on Inventories," Journal of Economic Perspectives, American Economic Association, vol. 5(1), pages 73-96, Winter.
    3. Blanchard, Olivier J, 1983. "The Production and Inventory Behavior of the American Automobile Industry," Journal of Political Economy, University of Chicago Press, vol. 91(3), pages 365-400, June.
    4. James A. Kahn, 1992. "Why is Production More Volatile than Sales? Theory and Evidence on the Stockout-Avoidance Motive for Inventory-Holding," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(2), pages 481-510.
    5. West, Kenneth D., 1990. "Evidence from seven countries on whether inventories smooth aggregate output," Engineering Costs and Production Economics, Elsevier, vol. 19(1-3), pages 85-90, May.
    6. Olivier Jean Blanchard & Stanley Fischer, 1989. "Lectures on Macroeconomics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262022834, April.
    7. Beason, Richard, 1993. "Tests of production smoothing in selected Japanese industries," Journal of Monetary Economics, Elsevier, vol. 31(3), pages 381-394, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Bennett T. McCallum, 2000. "On signal extraction and non-certainty-equivalence in optimal monetary policy rules, comments," Proceedings, Federal Reserve Bank of San Francisco.
    2. Colin Ellis, 2017. "Scenario-based stress tests: are they painful enough?," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 11(2), June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Darren Flood & Philip Lowe, 1993. "Inventories and the Business Cycle," RBA Research Discussion Papers rdp9306, Reserve Bank of Australia.
    2. Gérard P. Cachon & Taylor Randall & Glen M. Schmidt, 2007. "In Search of the Bullwhip Effect," Manufacturing & Service Operations Management, INFORMS, vol. 9(4), pages 457-479, April.
    3. Ramey, Valerie A. & West, Kenneth D., 1999. "Inventories," Handbook of Macroeconomics, in: J. B. Taylor & M. Woodford (ed.), Handbook of Macroeconomics, edition 1, volume 1, chapter 13, pages 863-923, Elsevier.
    4. Maccini, Louis J. & Moore, Bartholomew & Schaller, Huntley, 2015. "Inventory behavior with permanent sales shocks," Journal of Economic Dynamics and Control, Elsevier, vol. 53(C), pages 290-313.
    5. Yi Wen, 2007. "Production and Inventory Behavior of Capital," Annals of Economics and Finance, Society for AEF, vol. 8(1), pages 95-112, May.
    6. Wen, Yi, 2003. "The Power of Demand: A General Equilibrium Analysis of Multi-Stage-Fabrication Economy with Inventories," Working Papers 03-13r, Cornell University, Center for Analytic Economics.
    7. Louis Maccini, 2013. "Inventory Behavior with Permanent Sales Shocks," Economics Working Paper Archive 608, The Johns Hopkins University,Department of Economics.
    8. Paunić, Alida, 2016. "Solar Australia," MPRA Paper 71201, University Library of Munich, Germany.
    9. Humphreys, Brad R. & Maccini, Louis J. & Schuh, Scott, 2001. "Input and output inventories," Journal of Monetary Economics, Elsevier, vol. 47(2), pages 347-375, April.
    10. Louis J. Maccini & Bartholomew J. Moore & Huntley Schaller, 2004. "The Interest Rate, Learning, and Inventory Investment," American Economic Review, American Economic Association, vol. 94(5), pages 1303-1327, December.
    11. Mr. Yungsan Kim & Woon Gyu Choi, 2001. "Has Inventory Investment Been Liquidity-Constrained? Evidence From U.S. Panel Data," IMF Working Papers 2001/122, International Monetary Fund.
    12. Zhiwei Xu & Yi Wen & pengfei Wang, 2012. "When Do Inventories Destabilize the Economy? ---A Tractable Approach to (S,s) Policies," 2012 Meeting Papers 288, Society for Economic Dynamics.
    13. Yi Wen, 2008. "Inventories, liquidity, and the macroeconomy," Working Papers 2008-045, Federal Reserve Bank of St. Louis.
    14. Wang, Xun & Disney, Stephen M., 2016. "The bullwhip effect: Progress, trends and directions," European Journal of Operational Research, Elsevier, vol. 250(3), pages 691-701.
    15. George J. Hall, 1996. "Non-convex costs and capital utilization: a study of production and inventories at automobile assembly plants," Working Paper Series, Macroeconomic Issues WP-96-25, Federal Reserve Bank of Chicago.
    16. Wen, Yi, 2004. "General Equilibrium Analysis of the Supply of Capital," Working Papers 04-02, Cornell University, Center for Analytic Economics.
    17. Liu, Wen-Hsien & Chung, Ching-Fan & Chang, Kuang-Liang, 2013. "Inventory change, capacity utilization and the semiconductor industry cycle," Economic Modelling, Elsevier, vol. 31(C), pages 119-127.
    18. Wen, Yi, 2003. "Durable Goods Inventories and the Volatility of Production: A Puzzle," Working Papers 03-12, Cornell University, Center for Analytic Economics.
    19. Carine Bouthevillain & Didier Eyssartier, 1997. "Le rôle des variations de stocks dans les cycles d'activité des principaux pays industrialisés," Revue de l'OFCE, Programme National Persée, vol. 62(1), pages 151-202.
    20. Guariglia, Alessandra, 1999. "An analysis of the inventory behavior in a q-theoretic framework," International Journal of Production Economics, Elsevier, vol. 58(2), pages 131-146, January.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:ecorec:v:71:y:1995:i:1:p:27-39. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/esausea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.