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The magnitude of the speculative motive for holding inventories in a real business cycle model
Christiano, Lawrence J.; Fitzgerald, Terry J. - Federal Reserve Bank of Minneapolis - 1989
The motive to hold inventories purely in the hope of profiting from a price increase is called the speculative motive … implication for how large it is quantitatively. This paper incorporates the speculative motive for holding inventories into an … of the speculative role for holding inventories in this model is quite small. This suggests the possibility that the …
Persistent link: https://www.econbiz.de/10005498988
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Modeling inventories over the business cycle
Khan, Aubhik; Thomas, Julia K. - Federal Reserve Bank of Minneapolis - 2004
We evaluate two leading models of aggregate fluctuations with inventories in general equilibrium: the (S,s) model and … the stockout avoidance model. Each is judged by its ability to explain the observed magnitude of inventories in the U … correlation with sales. We find that the (S,s) model is far more consistent with the behavior of aggregate inventories in the …
Persistent link: https://www.econbiz.de/10004993835
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Inventories and the business cycle: an equilibrium analysis of (S,s) policies
Khan, Aubhik; Thomas, Julie K. - Federal Reserve Bank of Minneapolis - 2003
comovement between inventory investment and final sales is often interpreted as evidence that inventories amplify aggregate … inventories, though we do observe somewhat higher variability in employment, and lower variability in consumption and investment …. Thus, our equilibrium analysis reveals that the presence of inventories does not substantially raise the cyclical …
Persistent link: https://www.econbiz.de/10005712358
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(S,s) inventory policies in general equilibrium
Fisher, Jonas D.M.; Hornstein, Andreas - Federal Reserve Bank of Minneapolis - 1995
We study the aggregate implications of (S,s) inventory policies in a dynamic general equilibrium model. Firms in the model's retail sector face idiosyncratic demand risk, and (S,s) inventory policies are optimal because of fixed order costs. The model economy replicates salient features of the...
Persistent link: https://www.econbiz.de/10005498985
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Macroeconomic Volatility and External Imbalances
Fogli, Alessandra; Perri, Fabrizio - Federal Reserve Bank of Minneapolis - 2015
Does macroeconomic volatility/uncertainty affect accumulation of net foreign assets? In OECD economies over the period 1970-2012, changes in country specific aggregate volatility are, after controlling for a wide array of factors, significantly positively associated with net foreign asset...
Persistent link: https://www.econbiz.de/10011277951
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Sticky price models of the business cycle: can the contract multiplier solve the persistence problem?
Chari, V. V.; Kehoe, Patrick J.; McGrattan, Ellen R. - Federal Reserve Bank of Minneapolis - 1998
We construct a quantitative equilibrium model with price setting and use it to ask whether with staggered price setting monetary shocks can generate business cycle fluctuations. These fluctuations include persistent output fluctuations along with the other defining features of business cycles,...
Persistent link: https://www.econbiz.de/10005367611
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Is lumpy investment relevant for the business cycle?
Thomas, Julia K. - Federal Reserve Bank of Minneapolis - 2002
Previous research has suggested that discrete and occasional plant-level capital adjustments have significant aggregate implications. In particular, it has been argued that changes in plants? willingness to invest in response to aggregate shocks can at times generate large movements in total...
Persistent link: https://www.econbiz.de/10005367617
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Can the Mortonson-Pissarides matching model match the business cycle facts?
Cole, Harold L.; Rogerson, Richard - Federal Reserve Bank of Minneapolis - 1996
We examine whether the Mortensen-Pissarides matching model can account for the business cycle facts on employment, job creation, and job destruction. A novel feature of our analysis is its emphasis on the reduced-form implications of the matching model. Our main finding is that the model can...
Persistent link: https://www.econbiz.de/10005367620
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Theory ahead of business cycle measurement
Prescott, Edward C. - Federal Reserve Bank of Minneapolis - 1986
Recent developments in business cycle theory are reviewed. The principal finding is that the growth model, which was developed to account for the secular patterns in important economic aggregates, displays the business cycle phenomena once it incorporates the observed randomness in the rate of...
Persistent link: https://www.econbiz.de/10005367663
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Comparing alternative representations and alternative methodologies in business cycle accounting
Chari, V. V.; Kehoe, Patrick J.; McGrattan, Ellen R. - Federal Reserve Bank of Minneapolis - 2007
We make three comparisons relevant for the business cycle accounting approach. We show that in theory, representing the investment wedge as a tax on investment is equivalent to representing this wedge as a tax on capital income as long as the probability distributions over this wedge in the two...
Persistent link: https://www.econbiz.de/10005367678