Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/66913
Authors: 
Kryvtsov, Oleksiy
Zhang, Yang
Year of Publication: 
2010
Series/Report no.: 
Bank of Canada Discussion Paper 2010-9
Abstract: 
ToTEM - the Bank of Canada's principal projection and policy-analysis model for the Canadian economy - is extended to include inventories. In the model, firms accumulate inventories of finished goods for their role in facilitating the demand for goods. The model is successful in matching procyclical and volatile inventory investment behaviour. The authors show that the convex cost of stock adjustment is key to the model's ability to match the inventory data quantitatively.
Subjects: 
economic models
business fluctuations and cycles
JEL: 
E31
E32
Document Type: 
Working Paper
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