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Wednesday, July 22, 2020 | History

4 edition of Modeling inventories over the business cycle found in the catalog.

Modeling inventories over the business cycle

Aubhik Khan

Modeling inventories over the business cycle

by Aubhik Khan

  • 12 Want to read
  • 13 Currently reading

Published by Federal Reserve Bank of Minneapolis in [Minneapolis, Minn.] .
Written in English

    Places:
  • United States
    • Subjects:
    • Inventories -- United States -- Econometric models.,
    • Business cycles -- United States -- Econometric models.

    • Edition Notes

      StatementAubhik Khan and Julia K. Thomas.
      SeriesFederal Reserve Bank of Minneapolis, Research Department staff report ;, 343, Staff report (Federal Reserve Bank of Minneapolis. Research Dept. : Online) ;, 343.
      ContributionsThomas, Julia K.
      Classifications
      LC ClassificationsHB1
      The Physical Object
      FormatElectronic resource
      ID Numbers
      Open LibraryOL3390158M
      LC Control Number2004617317

      REAL BUSINESS CYCLES 7 Calibration Kydland and Prescott suggest a way to identify if this model can explain business cycles. Their method is known as calibration. The procedure is: • Use microeconomic studies or theory to find values for all of the pa-rameters. • Solve the model numerically, and simulate the Size: KB. To assess the usefulness of our model in identifying the role of inventories in the business cycle, we evaluate its ability to reproduce (1) the volatility of inventory in-vestment relative to production, (2) the procyclicality of inventory investment and (3) the greater volatility of production over that of sales. We view these three empir-.

        Business cycles refer to the cyclical increases followed by decreases in production output of goods and services in an economy. The stages in the business cycle include expansion, peak, recession. THE BUSINESS CYCLE APPROACH TO ASSET ALLOCATION 3 EXHIBIT 2: The world’s largest economies are all in expansion, though in various phases of the business cycle. Business Cycle Framework • Recession phase: Features a contraction in economic activity. Corporate profits decline and credit is scarce. Monetary policy becomes more accommodative.

      a model in which finished goods inventories facilitate sales. The model implies that, holding prices fixed, inventories should vary in proportion to anticipated sales, as in fact they do in the long run. Over the business cycle, however, the ratio of sales to stocks is highly persistent and. Recoveries are usually triggered by a combination of events. As business inventories shrink over time, firms begin to increase production. Hiring begins to pick up. Optimism returns and consumers start spending again. A new expansion begins. The ups and downs of the business cycle may hold little interest for you at this point in your Size: KB.


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Modeling inventories over the business cycle by Aubhik Khan Download PDF EPUB FB2

COVID Resources. Reliable information about the coronavirus (COVID) is available from the World Health Organization (current situation, international travel).Numerous and frequently-updated resource results are available from this ’s WebJunction has pulled together information and resources to assist library staff as they consider how to handle.

Modeling Inventories Over the Business Cycle Aubhik Khan, Julia K. Thomas. NBER Working Paper No. Issued in July NBER Program(s):Economic Fluctuations and Growth We search for useful models of aggregate fluctuations with inventories. Overall, while the (S,s) model performs well with respect to the inventory facts and other business cycle regularities, the stockout avoidance model does not.

There, the essential motive for stocks is insufficient to generate inventory holdings near the data without destroying the model's performance along other important by: Modeling Inventories Over the Business Cycle We search for useful models of aggregate fluctuations with inventories.

We focus exclusively on dynamic stochastic general equilibrium models that endogenously give rise to inventory investment and evaluate two leading candidates: the (S,s) model and the stockout avoidance model. Finished goods inventories move proportionally much less than sales or production over the business cycle, which we show implies procyclical marginal cost and countercyclical price markups.

Modeling inventories over the business cycle We search for useful models of aggregate fluctuations with inventories. We focus exclusively on dynamic stochastic general equilibrium models that endogenously give rise to inventory investment and evaluate two leading candidates: the (S,s) model and the stockout avoidance model.

Part I contains a theoretical analysis of the relation of inventories and inventory fluctuations to the business cycle.

Part II is a study of inventory fluctuations in Canada over the period from to and provides some inductive verification of the preceding theoretical argument.

inventories are an important component of the business cycle. Alan Blinder, a former Governor of the Federal Reserve System, famously remarked that “the business cycle, to a surprisingly large degree, is an inventory cycle.” Consis-tent with this perspective, much of the discussion about the timing of a recovery following economic recessions.

INVENTORIES AND THE BUSINESS CYCLE Darren Flood and Philip Lowe 1. INTRODUCTION On average, over the past 30 years inventory investment has accounted for just per cent of the level of Gross Domestic Product (GDP). In contrast, on average, quarterly changes in the level of inventory investment have accounted for 59 per.

At the start of the period, for a final goodsfirm with beginning of period inventories and adjustment cost ˇ, equations (8) - (9) describes the (ˇ) firm’s determination of (i) whether to place an order and (ii) the target inventory level with which to begin the production subpe- riod, conditional on an order.

The (S,s) model performs well with respect to the inventory facts and other business cycle regularities. By contrast, the essential risk motive in the stockout avoidance model is insufficient to generate inventory holdings near the data without destroying the model’s performance elsewhere, suggesting a fundamental problem in using reduced.

CiteSeerX — Modeling Inventories over the Business Cycle CiteSeerX - Document Details (Isaac Councill, Lee Giles, Pradeep Teregowda): We search for useful models of aggregate fluctuations with inventories.

Modeling Inventories over the Business Cycle. By Aubhik Khan and Julia K. Thomas. Cite. model and the stockout avoidance model.

Each model is examined under both technology shocks and preference shocks, and its performance gauged by its ability to explain the observed magnitude of inventories in the U.S.

economy, alongside other empirical Cited by: Modeling Inventories Over the Business Cycle Aubhik Khan and Julia K. Thomas NBER Working Paper No. August JEL No. E2, E3 ABSTRACT We search for useful models of aggregate fluctuations with by: Modeling inventories over the business cycle.

By Aubhik Khan and Julia K. Thomas. The (S,s) model performs well with respect to the inventory facts and other business cycle regularities.

By contrast, the essential risk motive in the stockout avoidance model is insufficient to generate inventory holdings near the data without destroying the Author: Aubhik Khan and Julia K. Thomas. Get this from a library.

Modeling inventories over the business cycle. [Aubhik Khan; Julia K Thomas; National Bureau of Economic Research.] -- "We search for useful models of aggregate fluctuations with inventories.

We focus exclusively on dynamic stochastic general equilibrium models that endogenously give rise to inventory investment and. In "The Role of Inventories in the Business Cycle," Aubhik Khan surveys the facts about inventory investment over the business cycle, then Author: Aubhik Khan.

The uncertain and sequential trading (UST) model of inventories behavior with iid shocks predicts that (a) the beginning of period inventories is a su Author: Benjamin Eden. Drawing on a specific model of aggregate activity which represents the current frontier in business cycle research, he then examines the contemporary theory of unemployment.

Finally and most controversially, he explores the role of monetary by: The literature on business inventory investment provides a good example of how theory and data interact in the ongoing process of research. This review of work on the relationship between inventory investment and business cycle fluctuations focuses on the developments of the last 15 years, a period characterized by renewed interest in the role that inventories play in the Cited by:.

This entertaining book describes the global history of economic fluctuations and business cycle theory over more than years. It explains the core of the problem and shows how cycles can be forecast and how they are managed by central by: 9.Journal of Monetary Economics 8 () North-Holland Publishing Company INVENTORIES, RATIONAL EXPECTATIONS, AND THE BUSINESS CYCLE* Alan S.

BLINDER ity, Ptrinceton, NJUSA NBER, Cambridge, MAUSA Stanley FISCHER Massachusetts Institute of Technology, Cambridge, MAUSA NBER, Cited by: Modeling Inventories Over the Business Cycle. By Julia K.

Thomas and Aubhik Khan. Abstract. Inventories, Business Cycles, (S,s), Stockout-avoidance OAI identifier: Provided by: Research Papers in Economics. Download PDF: Author: Julia K. Thomas and Aubhik Khan.