countercyclical stock-to-sales ratio over the business cycle, and (iv) more volatile input inventories than output inventories …. However, contrary to common beliefs, the model predicts that inventories are stabilizing, rather than destabilizing. The … volatility of aggregate output could rise by 30% if inventories were eliminated from the economy. Key to this seemingly counter …

Changes in the stock of firms' inventories are an important component of the business cycle. In fact, discussion about … the timing of a recovery following a recession often focuses on inventories. In "The Role of Inventories in the Business …

Inventories play an important role in business cycles. Inventory build-ups add momentum to the economy during … inventories in shaping the current outlook for the U.S. economy is particularly uncertain. In the early 1990s, inventory swings … inventory control practices, they believed, were permanently diminishing the role of inventories in the business cycle. Yet …

countercyclical stock-to-sales ratio over the business cycle, and (iv) more volatile input inventories than output inventories. It is …- avoidance motive leads to procyclical liquidity-value of inventories (hence, procyclical relative prices of output), which acts …