Inventories and real rigidities in New Keynesian business cycle models

Oleksiy Kryvtsov and Virgiliu Midrigan

Journal of the Japanese and International Economies, 2010, vol. 24, issue 2, 259-281

Abstract: Kryvtsov and Midrigan (2008) study the behavior of inventories in an economy with menu costs, fixed ordering costs and the possibility of stockouts. This paper extends their analysis to a richer setting that is capable of more closely accounting for the dynamics of the US business cycle. We find that the original conclusion survives in this setting: namely, the model requires an elasticity of real marginal cost to output approximately equal to the inverse intertemporal elasticity of substitution in consumption in order to account for the countercyclicality of the aggregate inventory-to-sales ratio in the data.

Keywords: Inventories; Calvo; pricing; Real; rigidities (search for similar items in EconPapers)
Date: 2010
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0889-1583(09)00064-1
Full text for ScienceDirect subscribers only

Related works:
Chapter: Inventories and Real Rigidities in New Keynesian Business Cycle Models (2010)
Working Paper: Inventories and Real Rigidities in New Keynesian Business Cycle Models (2009)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jjieco:v:24:y:2010:i:2:p:259-281

Access Statistics for this article

Journal of the Japanese and International Economies is currently edited by Takeo Hoshi

More articles in Journal of the Japanese and International Economies from Elsevier
Bibliographic data for series maintained by Catherine Liu ().