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Cyclical Behavior of Inventories and Growth Projections Recent Evidence From Europe and the United States
Author:
Mr. Willy A Hoffmaister
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Mr. Jens R Clausen
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Series:
IMF Working Papers
Volume/Issue:
Volume 2010: Issue 212
Language:
English
Publication Date:
01 Sep 2010
DOI:
https://doi.org/10.5089/9781455205431.001
ISBN:
9781455205431
ISSN:
1018-5941
Pages:
38
Keywords:
WP; stock; inventory behavior; buffer-stock model; Inventories; business cycle; forecasting; inventory investment; foresight inventory model; stylized fact; inventory change; inventories stem; Production growth; Business cycles; Employment protection; Vector autoregression; Supply shocks; Europe
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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In the United States and a few European countries, inventory behavior is mainly the outcome of demand shocks: a standard buffer-stock model best characterizes these economies. But most European countries are described by a modified buffer-stock model where supply shocks dominate. In contrast to the United States, inventories boost growth with a one-year lag in Europe. Moreover, inventories provide limited information to improve growth forecasts particularly when a modified buffer-stock model characterizes inventory behavior.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund