Inventory, Business Cycles and Monetary Transmission

Inventory changes constitute in all countries a small fraction of the Gross National Product but also a major source or an indicator of cyclical fluctuations. In this volume both possible ways of propagation are investigated by examining in the first part what macroeconomists have learned and still have to learn about inventories in the light of statistical definitions and problems. In the second part, the role of monetary shocks in propagating business cycles is considered through liquidity effects and in relation to inventory adjustment. A possible linkage between inventory and labor market is shown. Finally, new evidence and theoretical insights are provided on the linear-quadratic inventory model and its ability to discriminate econometrically among competing firm behavior.

Inhalt
1: Inventory Theory and Data.- Inventory Fluctuations and Macroeconomics.- Estimating the Change in Business Inventories in the US National Accounts.- 2: Inventory and Monetary Transmission.- Modeling the Liquidity Effect of a Money Shock.- Changing Relations between Inventories and Bank Loans.- Macroeconomic Policies and the Inventory Cycle.- 3: Inventory and Labor Market.- Inventories and Multi-Period Labor Contracts: Implications for Business Cycle Analysis.- 4: Econometrics of the Linear Quadratic Inventory Model.- Variance Bounds Tests of Inventory Behavior in Disaggregate Manufacturing Industries.- On a Test By K.D. West.- Some Evidence on the Finite Sample Behavior of an Instrumental Variables Estimator of the Linear Quadratic Inventory Model.