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A Comparison of the Behavior of Japanese and U.S. Inventories

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  • Kenneth D. West

Abstract

This paper compares the cyclical and secular behavior of Japanese and U.S. inventories at the aggregate and sectoral level, 1967-1987. While, as is well known, U.S. inventories are sharply procyclical, Japanese inventories are only mildly procyclical. In neither country do inventory and sales move together in the long run, in the sense that the two series do not seem to be cointegrated. In Japan, but not in the U.S., there is a secular decline in the inventory-sales ratio.

Suggested Citation

  • Kenneth D. West, 1991. "A Comparison of the Behavior of Japanese and U.S. Inventories," NBER Working Papers 3762, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:3762
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    References listed on IDEAS

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    1. Blinder, Alan S, 1981. "Inventories and the Structure of Macro Models," American Economic Review, American Economic Association, vol. 71(2), pages 11-16, May.
    2. 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.
    3. Prescott, Edward C., 1986. "Theory ahead of business-cycle measurement," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 25(1), pages 11-44, January.
    4. Kenneth D. West, 1990. "The Sources of Fluctuations in Aggregate Inventories and GNP," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 105(4), pages 939-971.
    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. 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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    Cited by:

    1. Lai, Richard, 2005. "The Geography of Retail Inventory," MPRA Paper 4755, University Library of Munich, Germany.

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