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"This paper provides a simple dynamic optimization model of durable goods inventories. Closed-form solutions are derived in a general equilibrium environment with imperfect information and serially correlated shocks. The model is then applied to scrutinize some popular conjectures regarding the...
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The main aim of the paper is to highlight the relation between flexibility and vertical integration. To this purpose, we go through the selection of the optimal degree of vertical disintegration of a flexible firm which operates in a dynamic uncertain environment. The enterprise we model enjoys...
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Conventional wisdom has it that inventory investment destabilizes the economy be-cause it is procyclical to sales. Khan … the existing (S,s) inventory literature that relies on the Krusell-Smith (1998) numerical solution methods, we … characterize (S,s) inventory policies in closed form despite the large state space in our general equilibrium model. Standard log …
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