Wang, Pengfei; Wen, Yi; Xu, Zhiwei - 2011
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 …