In March 2004, the once-heralded Los Angeles Community Development Bank (LACDB) closed its doors because of insolvency. The government-created bank's demise should come as no surprise. Credit officers at the not-for-profit bank lacked incentives to monitor loans on an ongoing basis. The LACDB's...

Earlier empirical studies of inventory behavior have been unable to provide evidence of the production smoothing role of inventories emphasized in the theoretical literature (see Blinder, 1984). We suggest that these results are due to a tradition of relying on a partial-adjustment model to...