Abstract

http://ssrn.com/abstract=480214
 
 

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Credit Conditions and the Cyclical Behavior of Inventories: A Case Studyof the 1981-82 Recession


Anil K. Kashyap


University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER)

Owen A. Lamont


Harvard University - Department of Economics

Jeremy C. Stein


Harvard University - Department of Economics; National Bureau of Economic Research (NBER)

November 1992

NBER Working Paper No. w4211

Abstract:     
This paper examines micro data on U.S. firms' inventories during different macroeconomic episodes. Much of the analysis focuses on the 1981-82 recession, a recession that was apparently precipitated by tight monetary policy. We find important cross-sectional effects in this period: firms that were "bank-dependent" were much more prone to shed inventories than their non-bank-dependent counterparts. In contrast, such cross-sectional differences are largely absent during a period of "loose" monetary policy later in the 1980s. Our findings are consistent with the view that 1) there is a bank lending channel of monetary policy transmission; 2) the lending channel is likely to be particularly important in explaining inventory fluctuations during downturns.

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Date posted: January 24, 2007  

Suggested Citation

Kashyap, Anil K. and Lamont, Owen A. and Stein, Jeremy C., Credit Conditions and the Cyclical Behavior of Inventories: A Case Studyof the 1981-82 Recession (November 1992). NBER Working Paper No. w4211. Available at SSRN: http://ssrn.com/abstract=480214

Contact Information

Anil K. Kashyap (Contact Author)
University of Chicago - Booth School of Business ( email )
5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
773-702-7260 (Phone)
773 702-0458 (Fax)
National Bureau of Economic Research (NBER) ( email )
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
773-702-7260 (Phone)
773-702-0458 (Fax)
Owen A. Lamont
Harvard University - Department of Economics ( email )
Littauer Center
Cambridge, MA 02138
United States
Jeremy C. Stein
Harvard University - Department of Economics ( email )
Littauer Center
Cambridge, MA 02138
United States
617-496-6455 (Phone)
617-496-7352 (Fax)
HOME PAGE: http://post.economics.harvard.edu/faculty/stein/stein.html
National Bureau of Economic Research (NBER)
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Cambridge, MA 02138
United States
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