Durable good inventories and the volatility of production

Durable good inventories and the volatility of production

by Wen

Part of Working paper ;

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"This paper provides a simple dynamic optimization model of durable goods inventories. Closed-form solutions are derived in a general equilibrium environment with imperfect information and serially correlated shocks. The model is then applied to scrutinize some popular conjectures regarding the causes of the volatility reduction of GDP since 1984"--Federal Reserve Bank of St. Louis web site.

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