The Roles of Inventories Investigated in a Factor Demand Model

An ECM is derived from first order conditions of a factor demand model. The role of inventory stock in the long run, i.e. a precautionary measure (according to Holt, Modigliani, Muth and Simon (1960)), and/or the role as a production factor (Kydland and Prescott (1982), Christiano (1988)) are investigated. French data from five industrial sectors (1970.I-1992.IV) are used for the analyses. The results indicate that neither the role as a precautionary measure nor the role of a production factor is rejected

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Year of publication:	2011
Authors:	Peeters, Marga
Publisher:	[2011]: [S.l.] : SSRN
Subject:	Theorie \| Theory \| Lagerzyklus \| Inventory cycle \| Schätzung \| Estimation \| Investition \| Investment \| Produktionskapazität \| Production capacity \| Frankreich \| France \| Faktornachfrage \| Factor demand