| Inventory Accelerator in General Equilibrium [by Pengfei Wang and Yi Wen] |
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| 发布时间: 10-02-04 阅读次数:168 新闻来源:清华大学中国财政税收研究所 |
Pengfei Wang; Yi Wen
NIFS Working Paper No. 000007
Abstract:
We develop a general-equilibrium model of inventories with explicit microfoundations by embedding the production-cost-smoothing motive (e.g., Eichenbaum, 1989) into a DSGE model with imperfect competition. We show that monopolistic firms facing idiosyncratic cost shocks have incentives to bunch production and smooth sales by carrying inventories. The model is broadly consistent with key stylized facts of aggregate inventory fluctuations, such as the procyclical inventory investment and the countercyclical inventory-to-sales ratio. In addition, the model yields novel predictions for the role of inventories in macroeconomic stability: Inventories may greatly amplify and propagate the business cycle, provided that markups or the variance of idiosyncratic cost shocks are sufficiently large. That is, a strong incentive to accumulate inventories under the cost-smoothing motive at the firm level may give rise to hump-shaped aggregate output dynamics and significantly higher volatility of GDP. Such predictions are in contrast to the implications of the recent general-equilibrium inventory literature, which shows that inventory investment induced by more conventional mechanisms (e.g., the stockout-avoidance motive and the (S,s) rule) does not increase the variance of aggregate output.
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