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

inventories react strongly and positively to news about future increases in total factor productivity. Theory suggests that the … transmission channel of news shocks to inventories works through movements in marginal costs, through movements in sales, or …

: in response to news about future increases in TFP, inventories rise and comove positively with other major macroeconomic … when extended to include inventories. To explain the empirical inventory behavior, we therefore develop a framework that …