and inventory facts well. Under the stockout constraint, inventories and demand are complements in generating sales, and … hence the optimal level of inventories increases in expected demand. We also show that the inventory to sales ratio is both …

demand is expected to be strong, firms increase their production not only to meet their demand but also to accumulate … investment is procyclical, and (ii) production is more volatile than sales. The key intuition is that, since inventories and … demand are complements in generating sales, the optimal level of inventories is increasing in expected demand. Thus, when …

labor demand, and that the heterogeneity in labor rigidity leads to aggregate persistence in labor and output. The key …

: The aggregate labor demand equation derived from the baseline Calvostyle model corresponds to the same reduced form as the …

production decisions. We rely on the financial accelerator mechanism due to Bernanke et al. (1999) and combine it with a bank …