The role of inventories for the propagation of aggregate fluctuations: lessons for Bulgaria (1999–2019)

Vasilev, Aleksandar (2021) The role of inventories for the propagation of aggregate fluctuations: lessons for Bulgaria (1999–2019). Journal of Economic and Administrative Sciences . ISSN 1026-4116

Full content URL: https://doi.org/10.1108/JEAS-11-2020-0195

Documents
The role of inventories for the propagation of aggregate fluctuations: lessons for Bulgaria (1999–2019)
Accepted Manuscript
[img]
[Download]
[img]
Preview
PDF
RBC_inventories_2021_accepted_str_abstract.pdf - Whole Document

234kB
Item Type:Article
Item Status:Live Archive

Abstract

Purpose: In this study, inventories are introduced as a productive input into a real-business-cycle (RBC) setup augmented with the government.

Design/methodology/approach: The model is calibrated to Bulgarian data for the period 1999–2019. The quantitative importance of the presence of inventories is investigated.

Findings: The quantitative effect of inventories is found to be important: decreasing consumption volatility and increasing employment variability. Those results, however, are at the expense of decreasing wage volatility and increasing investment volatility, and generally worsening the contemporaneous correlations of the main variables with output.

Originality/value: Fluctuations in inventory levels matter for business cycle fluctuations in Bulgaria, which is a novel result. Still, there is a need for more research on the incorporation of inventories into RBC models to better fit the Bulgarian experience.

Keywords:business cycles; inventories; Bulgaria
Subjects:L Social studies > L130 Macroeconomics
Divisions:Lincoln International Business School
ID Code:46878
Deposited On:21 Oct 2021 15:09

Repository Staff Only: item control page