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Author: Matteo Iacoviello
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
We build and estimate a two-sector (goods and services) dynamic stochastic general equilibrium model with two types of inventories: materials (input) inventories facilitate the production of finished goods, while finished goods (output) inventories yield utility services. The model is estimated using Bayesian methods. The estimated model replicates the volatility and cyclicality of inventory investment and inventory-to-target ratios. Although inventories are an important element of the model's propagation mechanism, shocks to inventory efficiency or management are not an important source of business cycles. When the model is estimated over two subperiods (pre and post 1984), changes in the volatility of inventory shocks or in structural parameters associated with inventories, such as the input inventory to output ratio, play a small role in reducing the volatility of output.
Author: Matteo Iacoviello
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
We build and estimate a two-sector (goods and services) dynamic stochastic general equilibrium model with two types of inventories: materials (input) inventories facilitate the production of finished goods, while finished goods (output) inventories yield utility services. The model is estimated using Bayesian methods. The estimated model replicates the volatility and cyclicality of inventory investment and inventory-to-target ratios. Although inventories are an important element of the model's propagation mechanism, shocks to inventory efficiency or management are not an important source of business cycles. When the model is estimated over two subperiods (pre and post 1984), changes in the volatility of inventory shocks or in structural parameters associated with inventories, such as the input inventory to output ratio, play a small role in reducing the volatility of output.
Author: Yi Wen
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
"This paper develops an analytically tractable general equilibrium model of inventory dynamics. Inventories are introduced into a standard RBC model through a precautionary stockout-avoidance motive. Under persistent aggregate demand shocks, the model is broadly consistent with the U.S. business cycle and key features of inventory behavior, including (i) a large inventory stock-to-sales ratio and a small inventory investment-to-sales ratio in the long run, (ii) excess volatility of production relative to sales, (iii) procyclical inventory investment but countercyclical stock-to-sales ratio over the business cycle, and (iv) more volatile input inventories than output inventories. Similar results can also be obtained under persistent aggregate supply shocks"--Federal Reserve Bank of St. Louis web site.
Author: Brad R. Humphreys
Publisher:
ISBN:
Category : Inventory control
Languages : en
Pages : 66
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Book Description
Author: Yi Wen
Publisher:
ISBN:
Category : Business cycles
Languages : en
Pages :
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Book Description
"This paper provides a general equilibrium multi-stage production model to explain the co-existence and co-movement of output- and input-inventories. The model offers a neoclassical perspective on the propagation mechanism of demand uncertainty. It reveals that uncertainty in demand at downstream can be transmitted and amplified towards upstream by inventory investment at all stages of production via input-output linkages, leading to a chain-multiplier effect on aggregate output and employment. The model is capable of explaining several long-standing puzzles of the business cycle associated with inventories"--Federal Reserve Bank of St. Louis web site.
Author: Jonas Daniel Maurice Fisher
Publisher:
ISBN:
Category : Equilibrium (Economics)
Languages : en
Pages : 60
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Book Description
Author: Fischer S. Black
Publisher: MIT Press
ISBN: 0262514095
Category : Business & Economics
Languages : en
Pages : 361
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Book Description
An incisive, unconventional assessment of general equilibrium theory; with a previously unpublished paper. Fischer Black is known for his brilliance as well as his sometimes controversial opinions. Highly respected for his scholarly writings in finance, he now moves into different territory with this incisive, unconventional assessment of general equilibrium theory and what that theory reveals about business cycles, growth, and labor economics. The general equilibrium approach, Black asserts, can be used to explain most of the economy's behavior. It can explain business cycles and growth without using sticky prices, irrationality, economies of scale, or imperfect competition. It can explain the volatility of consumption, output, sales, investment, and inventories with axiomatic utility and constant-returns-to-scale production. It can explain temporary layoffs, job changes with and without intervening unemployment, and the behavior of vacancies. It can explain lower wages in part-time jobs, wages that increase rapidly with time on the job, and the forces that cause migration from poor to rich countries. Although the general equilibrium approach can't be tested in conventional ways, it can be used to generate examples that explain stylized facts—generalized observations from the real world—that have preoccupied macroeconomists for the last decade. Black contrasts his interpretation of these facts with conventional interpretations. Finally, he reviews a substantial body of literature on these topics.
Author: Ezra Davar
Publisher: Routledge
ISBN:
Category : Business & Economics
Languages : en
Pages : 200
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Book Description
In this book the reader will find not only criticisms of conventional economic theory (general equilibrium (GE) and input-output (I-O)), but also suggestions for how to improve and advance it. The author shows that the Classics' - Smith, Marx and Walras - general equilibrium theories are characterized by a common approach, which has been misunderstood and misinterpreted. The assumptions of modern GE Theory were increased by 'Walras Law' (as formulated by his followers), which claims that the prices of factors (commodities) are equal to zero when there is excess supply. Hence, when compared to reality it is irrelevant. Leontief's attempt to bridge the theoretical (Walrasian) and empirical (Marxian) input-output versions was also incomplete. The author puts forward two new versions of GE Theory and I-O: 1) theoretical, which assumes price discrimination for mixed competition economy and the existence of unemployed factors with significantly positive price; and 2) empirical, which establishes a reciprocal connection between factors and categories of final uses. The suggested approach is demonstrated by practical application.
Author: K.R. Pearson
Publisher: Elsevier
ISBN: 008093403X
Category : Business & Economics
Languages : en
Pages : 409
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Book Description
"General-equilibrium" refers to an analytical approach which looks at the economy as a complete system of inter-dependent components (industries, households, investors, governments, importers and exporters). "Applied" means that the primary interest is in systems that can be used to provide quantitative analysis of economic policy problems in particular countries. Reflecting the authors' belief in the models as vehicles for practical policy analysis, a considerable amount of material on data and solution techniques as well as on theoretical structures has been included. The sequence of chapters follows what is seen as the historical development of the subject. The book is directed at graduate students and professional economists who may have an interest in constructing or applying general equilibrium models. The exercises and readings in the book provide a comprehensive introduction to applied general equilibrium modeling. To enable the reader to acquire hands-on experience with computer implementations of the models which are described in the book, a companion set of diskettes is available.
Author: Yi Wen
Publisher:
ISBN:
Category :
Languages : en
Pages : 42
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Book Description
It is widely believed in the literature that inventory fluctuations are destabilizing to the economy. This paper re-assesses this view by developing an analytically-tractable general-equilibrium model of inventory dynamics based on a precautionary stockout-avoidance motive. The model's predictions are broadly consistent with the U.S. business cycle and key features of inventory behavior, including (i) a large inventory stock-to-sales ratio and a small inventory investment-to-sales ratio in the long run, (ii) excess volatility of production relative to sales, (iii) procyclical inventory investment but countercyclical stock-to-sales ratio over the business cycle, and (iv) more volatile input inventories than output inventories. However, contrary to common beliefs, the model predicts that inventories are stabilizing, rather than destabilizing. The volatility of aggregate output could rise by 30% if inventories were eliminated from the economy. Key to this seemingly counter-intuitive result is that a stockout-avoidance motive leads to procyclical liquidity-value of inventories (hence, procyclical relative prices of final goods), which acts as an automatic stabilizer that discourages final sales in a boom and encourages final sales during a recession, thereby reducing the variability of GDP.
Author: Attila Chikán
Publisher: Springer
ISBN: 1447173716
Category : Business & Economics
Languages : en
Pages : 325
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Book Description
This book introduces a new approach in the field of macroeconomic inventory studies: the use of multivariate statistics to evaluate long-term characteristics of inventory investments in developed countries. By analyzing a 44-year period series of annual inventory change in percentage of GDP in a set of OECD countries, disclosing their relationship to growth, industry structure and alternative uses of GDP (fixed capital investments, foreign trade and consumption), it fills a gap in the economic literature. It is generally accepted that inventories play an important role in all levels of the economy. However, while there is extensive literature on micro- (and even item-) level inventory problems, macroeconomic inventory studies are scarce. Both the long-term processes of inventory formation and their correlation with other macroeconomic factors provide interesting conclusions about economic changes and policies in our immediate past, and present important insights for the future.
