Why Do Real and Nominal Inventory-Sales Ratios Have Different Trends

Valerie Ramey and Daniel J. Vine

No 10703, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This note explains the diverging trends between real and nominal aggregate inventory-sales ratios. The combined effect of two features of the data explains the divergence. First, while aggregate sales include both goods and services, inventories include only goods. Second, there has been a strong secular decrease in the relative price of goods. The combination of these two factors causes the real and nominal aggregate inventory-sales ratios to have different trends.

JEL-codes: E22 (search for similar items in EconPapers)
Date: 2004-08
New Economics Papers: this item is included in nep-mac
Note: EFG ME
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Citations: View citations in EconPapers (19)

Published as Ramey, Valerie A. and Daniel J. Vine. "Why Do Real And Nominal Inventory-Sales Rations Have Different Trends?," Journal of Money, Credit and Banking, 2004, v36(5,Oct), 959-963.

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Journal Article: Why Do Real and Nominal Inventory-Sales Ratios Have Different Trends? (2004)
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