What Drives Inventory Accumulation? News on Rates of Return and Marginal Costs

Christoph Görtz, Christopher Gunn and Thomas A. Lubik ()
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Thomas A. Lubik: Research Department, Federal Reserve Bank of Richmond, USA

Working Paper series from Rimini Centre for Economic Analysis

Abstract: We study the determinants of inventory accumulation in a structural VAR framework with news shocks. Specifically, we investigate how news shocks affect two key determinants of inventory movements, namely rates of return and marginal costs. We establish that inventories react strongly and positively to news about future increases in total factor productivity. We provide evidence that changes in external and internal rates of return are central to the transmission for such news shocks. We do not find evidence for a dominant role of marginal costs.

Keywords: Structural VAR; News Shocks; Inventories; Cost of Capital (search for similar items in EconPapers)
JEL-codes: C32 E22 E32 G31 (search for similar items in EconPapers)
Date: 2022-09
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http://rcea.org/RePEc/pdf/wp22-11.pdf

Related works:
Working Paper: What Drives Inventory Accumulation? News on Rates of Return and Marginal Costs (2022)
Working Paper: What Drives Inventory Accumulation? News on Rates of Return and Marginal Costs (2019)
Working Paper: What Drives Inventory Accumulation? News on Rates of Return and Marginal Costs (2019)
Working Paper: What Drives Inventory Accumulation? News on Rates of Return and Marginal Costs (2019)
Working Paper: What Drives Inventory Accumulation? News on Rates of Return and Marginal Costs
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Persistent link: https://EconPapers.repec.org/RePEc:rim:rimwps:22-11

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