Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/27504
Authors: 
Junayed, Sadaquat
Khan, Hashmat
Year of Publication: 
2009
Series/Report no.: 
Economics Discussion Papers / Institut für Weltwirtschaft 2009-23
Abstract: 
The relationship between inventory investment and the real interest rate has been difficult to assess empirically. Recent work has proposed a linear-quadratic inventory model with time-varying discount factor to identify the effects of real interest rate on inventory investment. The authors show that this framework does not separately identify the effects of real interest rate on inventory investment from variables that determine the expected marginal cost of production. Consequently, understanding the relationship between inventory investment and the real interest rate continues to be a challenge for macroeconomists.
Subjects: 
Inventory investment
real interest rate
Creative Commons License: 
http://creativecommons.org/licenses/by-nc/2.0/de/deed.en
Document Type: 
Working Paper

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