Abstract

http://ssrn.com/abstract=3679
 
 

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Evidence on the Link Between Firm-Level and Aggregate Inventory Behavior


Scott D. Schuh


Federal Reserve Bank of Boston - Research Department

November 21, 1996

Board of Governors of the Federal Reserve System Finance and Econ. Disc. Series 96-46

Abstract:     
This paper describes the finished goods inventory behavior of more than 700 U.S. manufacturing firms between 1985-93 using a new Census Bureau longitudinal data base. Three key results emerge. First, there is a broad mix of production-smoothing and production-bunching firms, with about two-fifths smoothing production. Second, firm-level inventory adjustment speeds are about an order of magnitude larger than aggregate adjustment speeds due to econometric aggregation bias. Finally, accounting for time variation in the inventory adjustment speed due to fluctuations in firm size improves the fit of a traditional aggregate inventory model by one-fifth.

JEL Classification: E22, D21, C23, C43

working papers series


Not Available For Download

Date posted: January 27, 1997  

Suggested Citation

Schuh, Scott D., Evidence on the Link Between Firm-Level and Aggregate Inventory Behavior (November 21, 1996). Board of Governors of the Federal Reserve System Finance and Econ. Disc. Series 96-46. Available at SSRN: http://ssrn.com/abstract=3679

Contact Information

Scott Schuh (Contact Author)
Federal Reserve Bank of Boston - Research Department ( email )
600 Atlantic Ave.
Boston, MA 02210
United States
617-973-3941 (Phone)
617-619-7541 (Fax)
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