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  • Open Daily: 10am - 10pm
    Alley-side Pickup: 10am - 7pm

    3038 Hennepin Ave Minneapolis, MN
    612-822-4611

Open Daily: 10am - 10pm | Alley-side Pickup: 10am - 7pm
3038 Hennepin Ave Minneapolis, MN
612-822-4611
The Rational Expectations Equilibrium Inventory Model: Theory and Applications

The Rational Expectations Equilibrium Inventory Model: Theory and Applications

Kollintzas, Tryphon

Paperback

Series: Lecture Notes in Economic and Mathematical Systems, Book 322

EconomicsGeneral Mathematics

ISBN10: 0387969403
ISBN13: 9780387969404
Publisher: Springer Nature
Published: Feb 21 1989
Pages: 269
Weight: 1.03
Height: 0.61 Width: 6.69 Depth: 9.61
Language: English
This volume consists of six essays that develop and/or apply rational expectations equilibrium inventory models to study the time series behavior of production, sales, prices, and inventories at the industry level. By rational expectations equilibrium inventory model I mean the extension of the inventory model of Holt, Modigliani, Muth, and Simon (1960) to account for: (i) discounting, (ii) infinite horizon planning, (iii) observed and unobserved by the econometrician stochastic shocks in the production, factor adjustment, storage, and backorders management processes of firms, as well as in the demand they face for their products; and (iv) rational expectations. As is well known according to the Holt et al. model firms hold inventories in order to: (a) smooth production, (b) smooth production changes, and (c) avoid stockouts. Following the work of Zabel (1972), Maccini (1976), Reagan (1982), and Reagan and Weitzman (1982), Blinder (1982) laid the foundations of the rational expectations equilibrium inventory model. To the three reasons for holding inventories in the model of Holt et al. was added (d) optimal pricing. Moreover, the popular accelerator or partial adjustment inventory behavior equation of Lovell (1961) received its microfoundations and thus overcame the Lucas critique of econometric modelling.

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