The Sources of Fluctuations in Aggregate Inventories and GNP

Kenneth West ()

The Quarterly Journal of Economics, 1990, vol. 105, issue 4, 939-971

Abstract: A simple real linear-quadratic inventory model is used to determine how cost and demand shocks interacted to cause fluctuations in aggregate inventories and GNP in the United States, 1947–1986. Cost shocks appear to be the predominant source of fluctuations in inventories and are largely, though not exclusively, responsible for the fact that GNP is more variable than final sales. Cost and demand shocks are of roughly equal importance for GNP. These estimates, however, are imprecise. With different, but plausible, values for a certain target inventory-sales ratio, cost shocks are less important than demand shocks for GNP fluctuations.

Date: 1990
References: Add references at CitEc
Citations: View citations in EconPapers (30)

Downloads: (external link)
http://hdl.handle.net/10.2307/2937880 (application/pdf)
Access to full text is restricted to subscribers.

Related works:
Working Paper: The Sources of Fluctuations in Aggregate Inventories and GNP (1989)
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:oup:qjecon:v:105:y:1990:i:4:p:939-971.

Ordering information: This journal article can be ordered from
https://academic.oup.com/journals

Access Statistics for this article

The Quarterly Journal of Economics is currently edited by Robert J. Barro, Lawrence F. Katz, Nathan Nunn, Andrei Shleifer and Stefanie Stantcheva

More articles in The Quarterly Journal of Economics from President and Fellows of Harvard College
Bibliographic data for series maintained by Oxford University Press ().