materials, for both production as well as for inventories. The more detailed treatment of inventory holdings offers new insights …

This paper introduces inventories in an otherwise standard dynamic stochastic general equilibrium model. Firms … accumulate inventories to facilitate sales, but face a cost of doing so in terms of costly storage of intermediate goods. Based … inventory dynamics has a significant impact on parameter estimates and the following analyses. We find that inventories enter …

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. …

This paper introduces inventories in an otherwise standard dynamic stochastic general equilibrium model. Firms … accumulate inventories to facilitate sales, but face a cost of doing so in terms of costly storage of intermediate goods. Based … inventory dynamics has a significant impact on parameter estimates and the following analyses. We find that inventories enter …

materials, for both production as well as for inventories. The more detailed treatment of inventory holdings offers new insights …

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 …