This paper introduces inventories in an otherwise standard Dynamic Stochastic General Equilibrium Model (DSGE) of the … business cycle. Firms accumulate inventories to facilitate sales, but face a cost of doing so in terms of costly storage of … intermediate goods. The paper's main contribution is to present a DSGE model with inventories that is estimated using Bayesian …

Economic theory predicts a negative relationship between inventories and the real interest rate, but previous empirical … inventories and the interest rate ?are unlikely to uncover a relationship. Our analysis suggests that inventories will not respond … predictions and show a highly significant long-run relationship between inventories and the interest rate, with an elasticity of …

This article studies inventories and monetary policy by estimating VAR models. The complex roots detected in our … production and inventories follow damped oscillations (stable sine curves), implying that a boom is the seed of the following … inventories, while booms after positive supply shocks are short-lived as the initial accumulation of inventories suppresses …

future changes in inventories and explain turning points in their trend are examined. The article analyzes changes in …