Credit Conditions and the Cyclical Behavior of Inventories: A Case Studyof the 1981-82 Recession
Anil Kashyap (),
Owen Lamont and
Jeremy Stein ()
No 4211, NBER Working Papers from National Bureau of Economic Research, Inc
This paper examines micro data on U.S. firms' inventories during different macroeconomic episodes. Much of the analysis focuses on the 1981-82 recession, a recession that was apparently precipitated by tight monetary policy. We find important cross-sectional effects in this period: firms that were "bank-dependent" were much more prone to shed inventories than their non-bank-dependent counterparts. In contrast, such cross-sectional differences are largely absent during a period of "loose" monetary policy later in the 1980s. Our findings are consistent with the view that 1) there is a bank lending channel of monetary policy transmission; 2) the lending channel is likely to be particularly important in explaining inventory fluctuations during downturns.
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Published as Quarterly Journal of Economics, 1994, vol CIX, no 3, pp 566-592
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Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:4211
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