This paper examines the short-run dynamics of manufacturing costs by detailing how plants in the U.S. automobile industry change output. Weekly data show a variety of margins on which firms adjust production. These margins, which are distinct from the usual factor demand choices, differ in their...

This paper investigates the link between the trend in the returns to education and foreign competition in concentrated industries. The authors argue that the impact of foreign competition on the relative wages of less skilled workers depends on the market structure of the industry penetrated....

This note explains the diverging trends between real and nominal aggregate inventory-sales ratios. The combined effect of two features of the data explains the divergence. First, while aggregate sales include both goods and services, inventories include only goods. Second, there has been a...

This paper explores one possible explanation for the apparent excess volatility of production relative to sales: nonconvexities in the technology facing firms. It is shown that if firms operated in a region of declining marginal costs, then small shifts in demand can cause production to jump...

This paper presents a theory of inventory investment by stage-of-processing, and uses it to examine the role of inventory investment in economic fluctuations. The model, in which inventories are treated as factors of production, is estimated for four durable goods industries. Three conclusions...

This paper explores the effect of news shocks on the current account and other macroeconomic variables using worldwide giant oil discoveries as a directly observable measure of news shocks about future output ? the delay between a discovery and production is on average 4 to 6 years. We first...