EconPapers    
Economics at your fingertips  
 

Microeconomic inventory adjustment: evidence from U.S. firm-level data

Jonathan McCarthy () and Egon Zakrajsek ()

No 2000-24, Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (US)

Abstract: We examine inventory adjustment in the U.S. manufacturing sector using quarterly firm-level data over the period 1978-97. Our evidence indicates that the inventory investment process is nonlinear and asymmetric, results consistent with a nonconvex adjustment cost structure. The inventory adjustment process differs over the business cycle: for a given level of excess inventories, firms disinvest more in recessions than they do in expansions. The inventory adjustment process has changed little between the 1980s and 1990s, suggesting that recent advances in inventory control have had little effect on adjustment costs. Nevertheless, the optimal inventory-sales ratio in the durable goods sector has declined significantly during our sample period.

Keywords: Inventories; Business cycles (search for similar items in EconPapers)
Date: 2000
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed

Downloads: (external link)
http://www.federalreserve.gov/pubs/feds/2000/200024/200024abs.html (text/html)
http://www.federalreserve.gov/pubs/feds/2000/200024/200024pap.pdf (application/pdf)

Related works:
Working Paper: Microeconomic inventory adjustment: evidence from U.S. firm-level data (2000) Downloads
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:fip:fedgfe:2000-24

Ordering information: This working paper can be ordered from
http://www.federalre ... /feds/fedsorder.html

Access Statistics for this paper

More papers in Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (US) Contact information at EDIRC.
Bibliographic data for series maintained by Ryan Wolfslayer ().

 
Page updated 2019-10-16
Handle: RePEc:fip:fedgfe:2000-24