 Declining Volatility in the U.S. Automobile IndustryDaniel J. Vine and Valerie Ramey American Economic Review, 2006, vol. 96, issue 5, 1876-1889 Abstract: Dramatic changes in the volatility of output occurred in the U.S. auto industry in the early 1980s. Namely, output volatility declined, the covariance of inventory investment and sales grew more negative, and adjustments to production schedules, which in earlier decades stemmed primarily from plants hiring and laying off workers, were more often accomplished with changes in average hours per worker after the mid- 1980s. Using a linear quadratic inventory model with intensive and extensive labor adjustments, we show how all of these changes could have stemmed from one underlying factor?a decline in the persistence of motor vehicle sales. (JEL G31, L25, L62, M11) Date: 2006 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:aea:aecrev:v:96:y:2006:i:5:p:1876-1889 Ordering information: This journal article can be ordered from Access Statistics for this article American Economic Review is currently edited by Esther Duflo More articles in American Economic Review from American Economic Association Contact information at EDIRC. |
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