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Please use this identifier to cite or link to this item:
http://hdl.handle.net/10419/17856
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| Title: | | Adjustment Costs, Inventories and Output  |
| Authors: | | Danziger, Leif |
| Issue Date: | | 2007 |
| Series/Report no.: | | Kieler Arbeitspapiere 1340 |
| Abstract: | | This paper analyzes the optimal adjustment strategy of an inventory-holding firm facing price- and quantity-adjustment costs in an inflationary environment. The model nests both the original menu-cost model that allows production to be costlessly adjusted, and the later model that includes price- and quantity-adjustment costs, but rules out inventory holdings. The firm?s optimal adjustment strategy may involve stockouts. At low inflation rates, output is inversely related to the inflation rate, and the length of time demand is satisfied decreases with the absolute value of the demand elasticity, the storage cost, and the real interest rate. |
| Subjects: | | Menu costs Quantity-adjustment costs Inventories Output Inflation |
| JEL: | | D24 D21 L23 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Publikationen von Forscherinnen und Forschern des IfW Kieler Arbeitspapiere, IfW
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