-logarithmic form and derive an estimable system of Euler equations for inventories and employment with implied cross …

) inventories by adding joint determination of input inventories which largely have been ignored Empirically input inventories are … more important than output inventories especially in business cycle fluctuations Maximum likelihood estimation of the …

Economic theory predicts a negative relationship between inventories and the real interest rate, but previous empirical … inventories and the interest rate ?are unlikely to uncover a relationship. Our analysis suggests that inventories will not respond … predictions and show a highly significant long-run relationship between inventories and the interest rate, with an elasticity of …