Inventory Investment Dynamics and Recoveries: A Comparison of Manufacturing and Retail Trade Sectors
Bec, Frédérique; Bessec, Marie (2013), Inventory Investment Dynamics and Recoveries: A Comparison of Manufacturing and Retail Trade Sectors, Economics Bulletin, 33, 3, p. 2209-2222
TypeArticle accepté pour publication ou publié
External document linkhttp://econpapers.repec.org/scripts/redir.pf?u=http%3A%2F%2Fwww.accessecon.com%2FPubs%2FEB%2F2013%2FVolume33%2FEB-13-V33-I3-P206.pdf;h=repec:ebl:ecbull:eb-12-00507
Journal nameEconomics Bulletin
MetadataShow full item record
Abstract (EN)This paper explores the existence of a bounce-back effect in inventory investment using the European Commission opinion survey on stocks of finished products in manufacturing and retail trade sectors for France, Germany and a European aggregate, from 1985q1 to 2011q4. Our empirical findings support the existence of a high recovery episode for inventory investment, during the quarters immediately following the recessions: it occurs later and lasts longer in manufacturing than in retail trade sector. Since a third phase of rapid recovery has not been found in final sales data so far, the rebound in inventories could in turn explain the GDP growth bounce-back pointed out in previous empirical studies. This calls for a careful modeling of the inventory investment behavior in any sensible theoretical explanation of aggregate business cycles.
Subjects / KeywordsThreshold auto-regression; bounce-back effects; business cycles; inventory investment
Showing items related by title and author.