traditional linear-quadratic model of output (finished goods) inventories by incorporating delivery and usage of input materials … input inventories are empirically more important than output inventories, especially in business cycle fluctuations. Firms … simultaneously choose input and output inventories; thus, the model exhibits feedback between stocks induced by dynamic stage …

industries that hold inventories. This decline is not simply a passive byproduct of reduced volatility in common factors or …

inventories: materials (input) inventories facilitate the production of finished goods, while finished goods (output) inventories … cyclicality of inventory investment and inventory-to-target ratios. Although inventories are an important element of the model … parameters associated with inventories play a minor role in reducing the volatility of output. …