A Model of Inventory and Layoff Behaviour under Uncertainty.
This paper develops a model of firm behavior under uncertainty designed to study the interac tion of inventories and layoffs. The model is a blend of a buffer sto ck model of inventory behavior and an implicit contract model of layo ffs. The model creates a distinction between inventory-biased and lay off-biased firms, each of which exhibits inherently different pattern s of response of inventories and temporary layoffs to demand shocks. In addition, the model implies that the inventory-layoff interaction tends to strengthen (weaken) the response of price and the work force to changes in anticipated demand (real interest rates). Copyright 1988 by Royal Economic Society.
Year of publication: |
1988
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Authors: | Haltiwanger, John C ; Maccini, Louis J |
Published in: |
Economic Journal. - Royal Economic Society - RES, ISSN 1468-0297. - Vol. 98.1988, 392, p. 731-45
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Publisher: |
Royal Economic Society - RES |
Saved in:
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