Inventories Employment and Hours

Marzio Galeotti (), Louis John Maccini () and Fabio Schiantarelli ()

Economics Working Paper Archive from The Johns Hopkins University,Department of Economics

Abstract: The purpose of this paper is to develop a model that integrates inventory and labor decisions We extend a model of inventory behavior to include a detailed specification of the role of labor input in the production process and of the costs associated with it In particular we distinguish between employment hours and effort per worker and allow for adjustment costs associated with employment changes We assume that the requirement function for effective hours has a general trans-logarithmic form and derive an estimable system of Euler equations for inventories and employment with implied cross-equation restrictions The econometric results shed light on several important topics including the shape of the marginal cost of output and the role of labor hoarding as an explanation of procyclical productivity and the persistence of inventory stocks Moreover they raise questions about the adequacy of commonly used specifications such as Cobb-Douglas approximations to the production process and the definition of labor input as the product of employment and effective hours worked per worker

Date: 2002-01
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Related works:
Working Paper: Inventories, employment and hours (2002)
Working Paper: Inventories, Employment and Hours (2002)
Working Paper: Inventories, Employment and Hours (2002)
Journal Article: Inventories, employment and hours (2005)
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Persistent link: http://EconPapers.repec.org/RePEc:jhu:papers:473

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