veblen contra clark and fisher veblen robinson harcourt lineages in capital controversies and beyond in the midst of joan robinson s critique of neoclassical capital theory she remarked that thorstein veblen had made my point much better than i did in 1908 robinson was referring to veblen s attacks on the capital theories of j b clark and irving fisher with little written on these earlier capital controversies one purpose of this article is to fill in the historical record by providing a capital specific exam ination of veblen s attacks and clark s and fisher s responses the second purpose is to explore the unique connections between the veblen clark fisher and the cambridge capital controversies by focussing on three authors veblen robinson and harcourt these controversies shared clashes of fundamentally different visions of economic life as well as differences regarding the historical contextualisation of the meaning of capital and the role of social institutions the adequacy of equilibrium analysis and ideology also play more complex roles compared to other capital controversies conducted within a largely shared vision

the new institutional economics this outstanding book presents new original contributions from some of the world s leading economists including ronald coase douglass c north masahiko aoki oliver e williamson and harold demsetz it demonstrates the extent and depth of the new institutional economics research programme which is having a worldwide impact on the economics profession

the psychology of early institutional economics the instinctive approach of thorstein veblen s conspicuous consumer theory abstract thorstein veblen a founder of original or old institutional economics combined social and evolutionary thought in his institutionalist approach to dealing with psychological social and economic issues the psychological content of veblen s writings takes instinct and habits into consideration the economic literature on the psychological content of veblen s writings has focused on habits despite the importance of instincts in veblen s works this paper attempts to discuss veblen s notion of instincts in order to make its role clearer in his approach to conspicuous consumer decision making it discusses the role of instincts the instinct of workmanship the relationship between habits and instincts and their influence on the conspicuous consumer consequently this paper contributes to a better understanding of how inner forces and socialization culminate in behavior in veblen s conspicuous consumer approach

corporate social responsibility and socially responsible investing a global perspective this research examines the relationship between corporate social responsibility csr and company stock valuation across three regions of the world after a brief introduction the article gives an overview of the evolving definition of csr as well as a discussion of the ways in which this construct has been operationalized presentation of the potential impact of corporate social performance on firm financial performance follows including investor characteristics the rationale behind their choices and their influence on the marketplace for securities worldwide the unique method used to select socially responsible investments is then provided that also includes a description of the quantitative techniques employed in the analyses results are offered subsequently and the close describes implications for global enterprises as socially responsible investments

inventories stock outs and production smoothing if stock outs are ignored and if demand shocks are additive then optimal behaviour requires that the marginal cost of production mc be equated with the expected marginal revenue of increasing expected sales by one unit emr however with more general demand shocks and still ignoring stock outs the excess of mc over emr has the same sign as the covariance of the slope of the demand curve and the marginal valuation of inventory the equality of emr and mc is also broken by taking account of stock outs even if demand shocks are additive if there is a production lag then taking account of stock outs implies that optimal behaviour will be characterized by production smoothing even if the cost of production is linear two alternative definitions of production smoothing are presented and optimal behaviour in the presence of stock outs displays each type of smoothing it is a well known proposition that a firm producing a storable good under conditions of increasing marginal cost will tend to smooth the time profile of its production relative to the time profile of its sales the incentive to smooth production arises from the fact that the cost function is a convex function of the level of production for a given average level of production average costs can be reduced by reducing the variation in production of course if the cost function is linear in the level of production then this incentive to smooth production disappears however we will demonstrate in this paper that if the possibility of stock outs is explicitly incorporated into the firm s dynamic optimization problem i e if we impose a non negativity constraint on inventories and if there is a lag in production then optimal behaviour can be characterized by production smoothing even if the cost function is linear

markups aggregation and inventory adjustment in this paper i suggest a unified explanation for two puzzles in the inventory literature first estimates of inventory speeds of adjustment in aggregate data are very small relative to the apparent rapid reaction of stocks to unanticipated variations in sales second estimates of inventory speeds of adjustment in firm level data are significantly higher than in aggregate data the paper develops a multisector model where inventories are held to avoid stockouts and price markups vary along the business cycle the omission of countercyclical markup variations from inventory targets introduces a downward bias in estimates of adjustment speeds obtained from partial adjustment models when the cyclicality of markups differs across sectors this downward bias is shown to be more severe with aggregate rather than firm level data similar results apply not only to inventories but also to labor and prices montercarlo simulations of a calibrated version of the model suggest that these biases are quantitatively significant

input and output inventories in the uk what is the role of inventories in uk manufacturing we present and estimate a model of inventories that considers separately finished goods and input i e the sum of raw materials and work in process inventories our results suggest that both types of inventories are used for production level and production cost smoothing we identify a small but significant negative relationship between inventories and the real interest rate thus providing support for one of the textbook channels of the monetary policy transmission mechanism variance decompositions indicate that technology shocks are the dominant driving factor behind cyclical changes in inventories

money and the business cycle with one period nominal contracts a modified version of the nominal contract developed by j a gray 1976 and s fischer 1977 is introduced in a general equilibrium model with money which has been used in the real business cycle literature money is introduced in the model through cash in advance constraint two kinds of contracts are examined namely a nominal wage contract and a nominal price contract the nominal wage contract improves the fit of the model in many respects the nominal price contract increases the output volatility enormously but it has some unrealistic features

detecting supply chain innovation potential for sustainable development in a world of limited resources it could be argued that companies that aspire to be good corporate citizens need to focus on making best use of resources user value and environmental harm are created in supply chains and it could therefore be argued that company business ethics should be extended from the company to the entire value chain from the first supplier to the last customer starting with a delineation of the linkages between business ethics corporate sustainability and the stakeholder concept this article argues that supply chains generally have a great innovation potential for sustainable development this potential could be highlighted with system thinking and the use of change management knowledge promoting not only innovations within technology but also within organizational improvement we propose process models and performance indicators as means of highlighting improvement potential and thus breaking down normative business ethics requirements to an opertionalizable corporate level good business ethics should focus on maximizing stakeholder value in relation to harm done our results indicate that focusing on supply chains reveals previously unknown innovation potential that seems to be related to limited system understanding the assumption is that increased visibility of opportunities will act as a driver for change results also highlight the importance of focusing on sustainability effects of the core business and clearly relating value created to harm done

uncertainty in sales and inventory behaviour in the u s trade sectors this paper investigates uncertainty in sales and inventory behavior for the u s wholesale and retail trade sectors first using a vector error correction model with garch m the authors find that the uncertainty measured by forecast error variance in sales does not affect inventory behavior in both trade sectors second using forecast error variance decomposition and estimated permanent components they observe that the uncertainty may be attributed more to demand shocks than to cost shocks

taking stock a critical assessment of recent research on inventories empirical and theoretical aspects of inventory behavior became hot topics in the 1950s and early 1960s no one seemed to notice the tension that was developing between the emerging macroeconomic and microeconomic views of inventories macroeconomists routinely thought of inventories as a destabilizing factor yet the prevailing micro theory viewed inventories as a stabilizing factor it was a fascinating question that was barely explored instead somewhat inexplicably interest in inventories dried up as if inventories were of minor economic significance and little intrinsic interest by the early 1980s then economists once again knew something they had known in the 1950s that inventory investment is of first order importance in business cycles but they were also beginning to realize that the standard production smoothing buffer stock model of inventories was in deep trouble this paper focuses on developments since that realization

accounting for output fluctuations in manufacturing there is a substantial body of evidence to the effect that output is more volatile than sales among manufacturing industries numerous explanations have been advanced to account for this excess output volatility some examples are pro cyclical inventory movements induced by a stockout avoidance motive cost and technology shocks and decreasing marginal costs this article assesses the contribution of these different motives to output volatility for six different manufacturing industries linear quadratic models are estimated for each of the industries and then dynamic simulations are employed to determine the volatility of output when one or more of the factors are removed from the model technology shocks provide the most significant contribution to output volatility the stockout avoidance motive is also important cost shocks provide a very small contribution and marginal production costs are increasing at the margin and thus stabilize output it is also shown that output volatility declines when curre

the determinants of manufacturing inventories in the uk the authors examine the determinants of inventory holding by the u k manufacturing sector over the period 1968 89 they find that inventory levels respond positively to output and its conditional variance and negatively to the level of gearing tehnological innovation in the form of computerized inventory control leads to a fall in the stock output ratio epirical results for inventories are examined in a cointegration and a general to specific error correction model with conditional variances estimated using an arch framework a backward looking error correction model is found to outperform a forward looking model although the latter also provides a reasonable fit to the data copyright 1993 by royal economic society

thorstein veblen and post darwinian economics thorstein veblen is noted for his view that economics should be an evolutionary science however although the term evolutionary has been adopted in general terms by subsequent institutional economists there has been remarkably little detailed exploration informed by biology of what veblen meant by an evolutionary science and the character of the post darwinian economics that he attempted to build this essay explores the reasons for veblen s attachment to darwinism informed by developments in biology itself and identifies some distinctive and enduring features of veblen s evolutionary theory copyright 1992 by oxford university press

inventories and asymmetric business cycle fluctuations in the uk a structural approach this paper investigates the movement of manufacturing inventories and production over the business cycle to arrive at an asymmetric structural equilibrium correction model initially cross correlation coefficients and deepness and steepness tests for skewness are utilized to present descriptive statistics of the time series cointegration analysis is performed on each disaggregate inventory by stage of production finished goods work in progress and raw materials with a set of explantory variables restricted cointegration vectors are added to the symmetric and non symmetric specifications of the structural equilibrium correction model these are compared by parameter constancy tests and one step ahead forecasts

business cycle asymmetry a deeper look this paper distinguishes two types of asymmetry in business cycles deepness and steepness deepness is defined as the characteristic that troughs are further below trend than peaks are above most previous research has focused exclusively on steepness which refers to cycles in which contractions are steeper than expansions a test for deepness is proposed and applied to u s post war quarterly unemployment real gnp and industrial production evidence of deepness is found for unemployment and industrial production while the evidence for real gnp is weaker previous evidence of steepness in unemployment is confirmed

some empirical evidence on the production level and production cost smoothing models of inventory investment the production smoothing model of inventories has long been the basic paradigm within which empirical research on inventories has been conducted the basic hypothesis embedded in this model is that inventories of finished goods serve primarily to smooth production levels in the face of fluctuating demand and convex cost functions however once we allow for shocks to technology and the costs of producing output firms will also use inventories to shift production from periods in which production costs are relatively high to periods in which production costs are relatively low in this sense inventories can serve to smooth production costs rather production levels in this paper we examine the empirical plausibility of the production level and production cost smoothing models of inventories our basic strategy is to derive and contrast a set of unconditional moment restrictions implied by these models in a way that minimizes the role of auxiliary assumptions regarding market structure and industry demand we find overwhelming evidence against the production level smoothing model and very little evidence against the production cost smoothing mode1 we conclude that the variance of production exceeds the variance of sales in most manufacturing industries because the production cost smoothing role of inventories is quantitatively more important than the production level smoothing role of inventories this abstract was borrowed from another version of this item

a review of sustainable supply chain management practices in canada there is a growing body of research on the theory and practice of sustainable supply chain management sscm however relatively little research has been conducted on the extent to which corporations have integrated sustainability principles into the management of their supply chain and the evaluation of supplier performance the purpose of this article is to explore the extent to which corporate sustainability principles are integrated into supply chain management scm in corporations canada is used as a case study in this article the study included a content analysis of one hundred canadian corporate sustainable development reports and in depth interviews with 18 canadian experts on sscm the article highlights the wide array of ways in which canadian corporations address sscm issues amongst other topics issues associated with supply chain governance standards for sscm collaboration with suppliers performance measurement and accountability within the supply chain are explored the findings reveal that there are many challenges in integrating sustainability into scm these challenges shed light on possible future directions for research in sscm this article underlines the need for research that reflects the interconnected nature of the economic environmental and social dimensions of sustainability particularly as it relates to measuring supplier performance on sustainability initiatives

total quality environmental management and total cost assessment an exploratory study abstract this study addresses one of the major perceived barriers to total quality environmental management tqem total cost assessment tca managers have difficulty assessing the impact of tqem programs because of the lack of appropriate measures in order for tqem investments to be given serious consideration a process is required for measuring monitoring and evaluating tqem by appropriately including all the environmental costs and savings for each investment option after reviewing the background of tqem and frameworks for capturing environmental costs an opportunity emerges for research involving the use of tqem and tca this research presented in this study develops a framework for identifying and formulating a set of cost measures associated with tqem investments the framework serves as a basis for comparing environmental cost measures used among several large us companies two major outputs yielded by this research are 1 a catalog of the various cost measures and procedures used to implement and carryout a tqem tca and 2 the tqem tca framework itself the catalog and framework will be important for later empirical assessment and modeling of tqem

the production and inventory behavior of the american automobile industry understanding inventory movements is central to an understanding of business cycles this paper presents an empirical study of the behavior of inventories in the automobile industry it finds that inventory behavior is well explained by the assumption of intertemporal optimization with rational expectations the underlying cost structure appears to have substantial costs of changing production as well as substantial costs of being away from target inventory thelatter being a function of current sales given this cost structure whether inventory behavior is stabilizing or destabilizing depends on the characteristics of the demand process in the automobile industry inventory behavior is destabilizing the variance of production is larger than the variance of sales

sustainable business model adoption among s p 500 firms a longitudinal content analysis study in this study we examine the diversity of sustainable business models adopted by the largest global corporations those listed in the s p 500 index over the period 2005 2014 we examine press release communications during this period which represent public data about business relevant events we expect that examining this communication can reveal longitudinal patterns in the adoption of sustainable business activities and models empirically we utilize academic and practitioner expert panels to build a set of keywords across nine sustainable business model archetypes and utilize automated content analysis to examine the breadth and nature of a firm s sustainable business activities and practices we find evidence of the increasing prominence of different types of sustainable business models over time in particular the results show that large capitalized firms have mostly adopted the environmentally oriented archetypes and to much lesser extent the societal and organizational ones

manufacturing stocks and forward looking expectations in the uk this paper derives a model of the stocks plan based on optimal behavior by the firm when facing adjustment costs with forward looking expectations formation estimates of the model are reported for manufacturing using three alternative expectations mechanisms for determining expected sales time series published forecasts derived from national institute published forecasts and rational expectations the latter uses a submodel dependent on weakly exogenous variables single equation and whole model comparisons are made of the stocks equation estimated with forward expectations versus a traditional backward looking model these favor the forward looking model copyright 1986 by the review of economic studies limited

a measure of bullwhip effect in supply chains with a mixed autoregressive moving average demand process abstract in this paper we quantify the impact of the bullwhip effect the phenomenon in which information on demand is distorted as moving up a supply chain for a simple two stage supply chain with one supplier and one retailer assuming that the retailer employs a base stock inventory policy and that the demand forecast is performed via a mixed autoregressive moving average model arma 1 1 we investigate the effects of the autoregressive coefficient the moving average parameter and the lead time on the bullwhip effect

humans environment and economies from vicious relationships to virtuous responsibility abstract the debates questioning the meaning of growth point to a need for a more holistic understanding of human beings and of the economic actor fundamental to economic theory and practice this contribution turns to virtue ethics in order to reframe the self in more reflexive relational and environmental terms we explore the significance of understanding humans sense of responsibility that is quintessentially relational and of their capacity and need to relate to nature as well as community and society we begin by reviewing the main arguments in the thriving debate in ecological economics around what the characteristics of the human being can contribute to implement an ecologically sustainable development our aim is then to draw a link between this debate and that of virtue ethics that leads to a different understanding of the human being of what can contribute to individual wellbeing and a good life responsibility we argue is not only a value but a virtue that enables individuals to find meaning in acting responsibly towards the environment emphasising the multiple benefits that arise from framing good lives in active terms we conclude reflecting on the challenges to and implications of our proposition for government institutions particularly education

investigation of production sales and inventory relationships using multicointegration and non symmetric error correction models the accumulated sum of a stationary series is called integrated if a linear combination of some of the integrated series is stationary it is said to be cointegrated this paper presents empirical results on inventories to consider the possibility of a deeper form of cointegration called multicointegration which is introduced in granger and lee 1989 a vector integrated series is multicointegrated if the accumulated sum of its stationary cointegrated linear combination is again cointegrated with itself inventory which is the accumulated sum of production minus sales is probably cointegrated with production and sales the empirical results generally support the presence of multicointegration of production and sales in many u s industries and industrial aggregates the results also favour the non symmetric error correction model providing evidence that the strength of attraction is different on both sides of the attractor a modified s s rule for inventory control is investigated in the context of a non symmetric error correction model and the results generally do not support the s s rule sufficient evidence is found to conclude that multicointegration is a useful concept in the area of inventory determination

socio economic evolution and darwinism in thorstein veblen a critical appraisal the paper questions the idea that a biology based perspective and more speci callydarwinian population thinking constitutes a real alternative for the study of theevolution of social systems this is done through a critical appraisal of the work ofthorstein veblen even though veblen s account of the evolution of humankindmakes the notion of natural selection practically redundant his remainingattachment to darwinism created two other serious tensions for him first hisattachment to the darwinian scheme of descent with modi cation kept him fromdevisingasystematictheoryofthedifferentsocio economicsystemshestudied thisshortcoming is more evident in his analysis of capitalism which not only lacks anelaborated theory but also contradicts his initial evolutionary programme second by postulating that human history is a question of cultural change veblen wastempted to con ate social structures institutions and habits of thought key words evolution thorstein veblen darwinism institutions social structuresjel classi cations b52 b41 b15 p10

veblen s evolutionary programme a promise unfulfilled this article examines in detail the way in which veblen attempted to give theoretical expression to the programme for an evolutionary economics that he outlined in methodological terms in his 1898 essay why is economics not an evolutionary science veblen s conception of darwinian methodological principles led him to attempt to develop a theory of institutional evolution that was purely causal in nature this theory was never satisfactorily developed by veblen at base his theory was one of new technology changing economic conditions and new economic conditions leading to new ways of thinking and to new institutions through a non intentional process of habituation those who attempted to follow veblen such as hoxie and mitchell found difficulties with the key aspects of this theory and both men came to abandon it institutionalism in the interwar period is devoid of attempts to develop veblen s theory and veblen s programme remained a promise unfulfilled

inventories as factors of production and economic fluctuations this paper presents a theory of inventory investment by stage of processing and uses it to examine the role of inventory investment in economic fluctuations the model in which inventories are treated as factors of production is estimated for four durable goods industries three conclusions emerge from the estimation first the estimates generally satisfy the theoretical restrictions second the elasticity of inventory demand with respect to output is high indicating an important accelerator effect finally the estimates suggest that shifts in the demand for inventories are an important source of economic fluctuations copyright 1989 by american economic association

veblen on the machine process and technological change this paper explores veblen s analysis of technological change i claim that rather than succumbing to the traditional criticisms his approach founders due to his failure to fully articulate a social ontology whilst veblen s analysis of his own time remains in many ways compelling this failure creates a gap between meta theoretical promise and current theoretical results i show how work in the social studies of technology has successfully avoided the ontological problems associated with veblenian economics this success is tempered by the fact that the field has not yet provided an appropriate framework to systematise the ways in which technical innovations transform social relations in ways that are beyond conscious control and manipulation copyright the author 2009 published by oxford university press on behalf of the cambridge political economy society all rights reserved oxford university press

are economic time series asymmetric over the business cycle it has long been argued that major cyclical variables such as the unemployment rate display an asymmetric behavior over various phases of the business cycle the paper provides a statistical test for this hypothesis using the framework of finite state markov processes i implement a test to see if the behavior of the unemployment rate is characterized by sudden jumps and slower drops it is argued that the framework provided in the paper can also be used to test other sample path properties of economic time series

rational expectations and the smoothing properties of inventories of finished goods abstract this paper formulates and estimates a dynamic rational expectations equilibrium model of inventories of finished goods and employment of labor the view that the primary role of inventories of finished goods is to act as a buffer stock in the face of fluctuating demand is examined both the model and estimation results indicate that this is the case because of differences in the costs involved for firms in changing their inventory stocks and labor force in addition to providing some new evidence on the behavior of inventories of finished goods and employment the paper illustrates a technology for maximum likelihood estimation of structural parameters under the hypothesis of rational expectations

inventories and sticky prices note in a recent contribution to this review alan blinder provides an interesting analysis of the relationship between optimal inventory decisions and the process of price adjustment arguing that inventory permits separation of production and sale decisions and allows the firm greater flexibility in responding to anticipated demand disturbances blinder shows that the responsiveness of relative prices depends critically upon the cost of storage and the temporal structure of the demand shocks few economists would fault the intuitive substance of blinder s basic proposition and the proposition is justified with characteristic precision the analysis however is considerably less general than blinder maintains the formal argument of his paper relies upon a simple model of a monopolist capable of backlogging orders and storing unsold goods as the model is constructed order backlogs assume a role of fundamental importance in any stationary equilibrium this feature of the model vitiates blinder s extension of his result to situations in which order backlogs are prohibited the basic monopoly model developed in sections i and ii of blinder s paper places no restriction upon the sign of inventory negative inventory is interpreted as net unfilled orders while no distinction is drawn between reductions in gross inventory and additions to the order backlog as a result the cost of holding inventory is symmetric around an arbitrary minimum point the only role of inventory is to permit the time paths of production and sales to differ gross inventory allows production to antedate sales while order backlogs generate revenue before production costs are borne under these circumstances if future costs and revenues are discounted it is natural to expect any stationary equilibrium level of net inventory to be negative this can be shown to be true of blinder s model it is useful to distinguish in general between the nonstochastic stationary level of inventory n and the stochastic stationary level n the former is realized when the current expected demand disturbance eo is zero and production equals sales the latter which differs from customary usage represents the level of inventory expected to prevail when adjustment to the current nonzero expected demand disturbance is complete if the demand disturbance is not a random walk so that p 1 in blinder s 5 the two equilibria coincide relatively little attention is devoted to either stationary solution because blinder s main interest is in the optimal current solution level n1 the stochastic stationary level is crucially important however since it represents the goal toward which the current choice must provide an optimal first step to verify that both nand n are negative whenever production is strictly positive note that blinder s necessary condition 7 with the coefficient cl set equal to zero together with the definition of xa as the deviation of the shadow value of inventory q from its nonstochastic stationary value q implies

inventories inflation dynamics and the new keynesian phillips curve abstract we introduce inventories into an otherwise standard new keynesian model and study the implications for inflation dynamics inventory holdings are motivated as a means to generate sales for demand constrained firms we derive various representations of the new keynesian phillips curve with inventories and show that one of these specifications is observationally equivalent to the standard model with respect to the behavior of inflation when the model s cross equation restrictions are imposed however the driving variable in the new keynesian phillips curve real marginal cost is unobservable and has to be proxied by for instance real unit labor cost an alternative approach is to impute marginal cost by using the model s optimality conditions we show that the stock sales ratio is linked to marginal cost we also estimate these various specifications of the new keynesian phillips curve using gmm we find that the predictive power of the inventory specification at best approaches that of the standard model but does not improve upon it

the production impact of cash for clunkers implications for stabilization policy during july and august of 2009 americans purchased nearly 700 000 new automobiles or light trucks under the government s cash for clunkers program officially the car allowance rebate system or cars under the terms of the purchase qualified buyers traded in their old vehicles to receive a rebate on the price of a new vehicle the amount of the rebate either 3 500 or 4 500 depended on both the model that was traded in and the model that was acquired the direct cost to taxpayers of subsidizing these purchases was roughly 2 8 billion the program had two primary goals to reduce energy consumption and pollution by inducing consumers to replace their old gas guzzlers with newer fuel efficient models and to serve as a stimulus for the troubled automobile industry and the u s economy as a whole in this article we take a close look at the second objective exploring how the cars program affected sales and more important production in the automobile industry 1 drawing on our findings we then propose an answer to the more difficult question of the program s impact on u s gross domestic product gdp 2 in line with other recent studies our analysis shows that the cars program had only a transitory cumulative effect on sales we estimate an initial impact of about 450 000 additional automobile sales but these were essentially shifted from the periods before and especially after the program we calculate that by january 2010 the cumulative effect of the cars program on auto sales was essentially zero 3 more important for our purposes however is the program s effect on automobile production while most studies of cars have focused on sales we argue that the program s success as a stimulus to the economy hinges on its impact on production production increases are more likely to translate into higher gdp and employment gdp being fundamentally a measure of production sales clearly rose at the outset but given that the industry can simply let inventory stocks absorb the increase in sales higher sales alone do not imply higher gdp or employment 4 overall we find that the program had a very modest and short lived effect on production production was about 200 000 units higher during the program in comparison to the 450 000 increase in sales sales from september 2009 to january 2010 were correspondingly lower than they would have been in the absence of cars which allowed producers to have lower production while still replenishing their inventory stocks thus on a quarterly basis we estimate that the cars program shifted production by around 100 000 units from 2009q4 and 2010q1 to 2009q3 these calculations suggest that the program had a negligible direct effect on gdp shifting less than roughly 2 billion or less than one tenth of 1 of gdp into 2009q3 from the subsequent two quarters this contrasts starkly with a study released by the department of transportation dot in the immediate aftermath of the program which concluded that cars had given a substantial boost to both gdp and employment in the final section of the article we discuss why our conclusions differ from those of the dot study our findings raise broader questions beyond just this particular program about the efficacy of efforts to stimulate short term spending it is clearly a mistake to gauge their impact by just looking at the spending they induce without looking at the supply side it is reasonable to expect that producers will use other margins than production and employment to respond to temporary movements in sales so the only question is quantitative how large is the gap between the sales and production impact we find it to be large in the case of cash for clunkers in what follows we will lay out the economics behind our analysis by examining how rebates and other transitory price changes affect consumer purchases and manufacturers inventory decisions

inventories and the volatility of production a stylized fact associated with inventory behavior is that the variance of production exceeds the variance of sales this paper presents a model of production decisions with demand uncertainty that incorporates no nnegativity constraints on inventories even with no productivity shocks optimal behavior by the firm is consistent with this stylized fact either if demand exhibits positive serial correlation or if the firm can backlog excess demand the reason is that a demand shock affects both the actual inventory level given unchanged production and the desired level production must replenish the stock and adjust to the new desired level copyright 1987 by american economic association

gauging the performance of the linear quadratic inventory model the explanatory and predictive abilities of the infinite horizon linear quadratic inventory model are gauged using the flexible accelerator model as a baseline tests of explanatory power for six nondurables industries indicate that the flexible accelerator has superior explanatory power for inventories and output in the majority of industries tests of predictive ability during the late 1990s also support the superiority of the flexible accelerator model

a virtue ethics analysis of supply chain collaboration technological advancements in information systems over the past few decades have enabled firms to work with the major suppliers and customers in their supply chain in order to improve the performance of the entire channel tremendous benefits for all parties can be realized by sharing information and coordinating operations to reduce inventory requirements improve quality and increase customer satisfaction but the companies must collaborate effectively to bring these gains to fruition we consider two alternative methods of managing these interfirm supply chain relationships in this article the first which we have named dictatorial collaboration occurs when a dominant supply chain entity assumes control of the channel and forces the other firms to follow its edicts we compare and contrast this method with sustainable collaboration in which the parties share resources and engage in joint problem solving to improve the performance of the system as a whole we use a virtue ethics lens to describe these methods of relationship management to suggest that sustainable collaboration is preferable to dictatorial collaboration both operationally and ethically in the long run

an examination of business cycle features in uk sectoral output this article examines business cycle features of uk gross domestic product gdp sectors with regard to trends cycles and growth the empirical study adopts the kalman filter to decompose these gdp sectors into trend and cycle components the general model of this study encompasses a number of alternative specifications about trend growth therefore accommodating diverse views on growth there is reasonable support in the results for a mean reverting stochastic growth model for the uk economy the characteristics in trends and cycles of uk gdp sectors are discussed focusing on their similarities and differences around business cycles

coordinating lead times and safety stocks under autocorrelated demand we consider a supply chain in which orders and lead times are linked endogenously as opposed to assuming lead times are exogenous this assumption is relevant when a retailer s orders are produced by a supplier with finite capacity and replenished when the order is completed the retailer faces demands that are correlated over time either positively or negatively which may for example be induced by a pricing or promotion policy the auto correlation in demand affects the order stream placed by the retailer onto the supplier and this in turn influences the resulting lead times seen by the retailer since these lead times also determine the retailer s orders and its safety stocks which the retailer must set to cover lead time demand there is a mutual dependency between orders and lead times the inclusion of endogenous lead times and autocorrelated demand represents a better fit with real life situations however it poses some additional methodological issues compared to assuming exogenous lead times or stationary demand processes that are independent over time by means of a markov chain analysis and matrix analytic methods we develop a procedure to determine the distribution of lead times and inventories that takes into account the correlation between orders and lead times our analysis shows that negative autocorrelation in demand although more erratic improves both lead time and inventory performance relative to iid demand positive correlation makes matters worse than iid demand due to the endogeneity of lead times these effects are much more pronounced and substantial error may be incurred if this endogeneity is ignored

consequences of hodrick prescott filtering for parameter estimation in a structural model of inventory behaviour much work in macroeconomics relies on detrending a time series prior to analysis a popular method of detrending has been the hodrick prescott hp filter this filter has been widely applied in th

manufacturing stocks expectations risk and co integration the modelling of firms inventory behaviour has been plagued by structural instability and despite a great deal of research effort over recent years little headway has yet been made in producing a structurally stable model of stock levels wallis et al i987 surveyed the main uk models of inventory behaviour and concluded that the tests of predictive failure are particularly powerful when conducted over periods in which data characteristics change and over half the equations we consider are rejected on the basis of their predictive performance in the early i980s this is a surprising result since the poor performance of their predecessors over this period was a prime motivation for the research that has led to the current specifications the similarity in turning points in the forecast errors both for the aggregate stockbuilding equations and for the different categories of stocks suggests the omission of some factor s common to all specifications wallis et al i987 p 144 their analysis was conducted using within sample stability tests and more recent data would undoubtedly find an even higher rejection rate accordingly this paper seeks to identify important omitted components or misspecification in the existing models of inventory behaviour in response to the suggestion in the last sentence of the wallis et al quotation we take as our point of departure a number of recent papers on company sector behaviour which have focused on intertemporal optimisation under rational expectations the seminal work of sargent 1978 on the demand for labour has been followed by a number of studies which seek to treat the firms expectations of future variables in an explicit way this work includes nickell 1 984 and henry and wren lewis i 984 on the labour market and hall et al i986 on the determination of stock levels one common finding amongst these and many other papers is that of a root in the dynamic process under consideration which is close to unity this means that the long run solution for the model is poorly determined and this finding is a cause for some concern recently with the growth of the literature on cointegration see engle and granger 1987 hall i986 this finding takes on an even more serious aspect since a symptom of non cointegration is the lack of a well defined long run solution so the finding of a near unit root may be indicative that earlier researchers were in fact working with sets of variables which failed to cointegrate which would inevitably lead to spurious regression problems in the sense of granger and newbold i 974

motives and performance outcomes of sustainable supply chain management practices a multi theoretical perspective many researchers believe the tremendous industrial development over the past two centuries is unsustainable because it has led to unintended ecological deterioration despite the ever growing attention sustainable supply chain management sscm has received most sscm research and models look at the consequences rather than the antecedents or motives of such responsible practices the few studies that explore corporate motives have remained largely qualitative and large scale empirical analyses are scarce drawing on multiple theories and combining supply chain and business ethics literature we purport that instrumental relational and moral motives are behind a firm s engagement in sscm practices specifically we examine the links between corporate motives sscm practices and firm performance using a sample of 259 supply chain firms in germany we empirically test five hypothesized relationships our results reveal that relational and moral motives are key drivers and that firms exhibiting high levels of moral obligations tend to outperform those primarily driven by amoral considerations findings of this study contribute to multiple literatures espousing sustainability management and can help policy makers stakeholder groups and scholars develop more robust strategies for encouraging firms to practice sscm

lifestyle conformity and lifecycle saving a veblenian perspective since the 1950s the lifecycle hypothesis has been the dominant explanation for the inverse u in household wealth accumulation this paper advances an alternative explanation rooted in the ideas of veblen that emphasises the role of lifestyle conformity because people tend to adopt lifestyles common to their social group and modify them in standard ways as they age lifecycle norms impart a certain order to the accumulation of assets and liabilities which enables people to do lifecycle saving via habitual thinking after laying out the argument conceptually the paper provides empirical evidence on the role of conformity in lifecycle saving and discusses its contribution to the current low saving rate in the usa copyright the author 2008 published by oxford university press on behalf of the cambridge political economy society all rights reserved oxford university press

bullwhip effect measurement and its implications the bullwhip effect or demand information distortion has been a subject of both theoretical and empirical studies in the operations management literature in this paper we develop a simple set of formulas that describe the traditional bullwhip measure as a combined outcome of several important drivers such as finite capacity batch ordering and seasonality our modeling framework is descriptive in nature as it features certain plausible approximations that are commonly employed in practical inventory systems the results are nonetheless compelling and can be used to explain various conflicting observations in previous empirical studies building on the theoretical framework we discuss the managerial implications of the bullwhip measurement we show that the measurement can be completely noninformative about the underlying supply chain cost performance if it is not linked to the operational details such as decision intervals and leadtimes specifically we show that an aggregated measurement over relatively long time periods can mask the operational level bullwhip in addition we show that masking also exists under product or location aggregation in some illustrative cases

is investment time irreversible some empirical evidence for disaggregated uk manufacturing data it has long been suggested that investment may be time irreversible and consideration of the option value of waiting to invest has aroused renewed interest in this issue this study tests for time irreversibility in uk investment according to disaggregation by type of investment expenditure and across manufacturing sector groupings the test results reported indicate that the irreversibility of investment patterns varies not only from industry to industry but also according to the type of capital being purchased with significant time irreversibility detected in gross fixed capital formation and aggregate vehicles expenditure and industrial sector groupings comprising fuels and oil refining engineering and vehicles and textiles and leather however only in the first and last of these series is time irreversibility attributable to non linearities in the underlying data generating process and consistent with threshold effects which may be associated with s s type models of investment dynamics

conflict minerals and supply chain due diligence an exploratory study of multi tier supply chains as recently stakeholders complain about the use of conflict minerals in consumer products that are often invisible to them in final products firms across industries implement conflict mineral management practices conflict minerals are those whose systemic exploitation and trade contribute to human right violations in the country of extraction and surrounding areas particularly supply chain managers in the western world are challenged taking reasonable steps to identify and prevent risks associated with these resources due to the globally dispersed nature of supply chains and the opacity of the origin of commodities supply chain due diligence scdd represents a holistic concept to proactively manage supply chains reducing the likelihood of the use of conflict minerals effectively based on an exploratory study with 27 semi structured interviews within five european industries we provide insights into patterns of implementation key motivational factors barriers and enablers and impacts of scdd in mineral supply chains our results contribute to both theory and practice as we provide first insights to scdd practices and make recommendations for an industry wide implementation of scdd altogether this study provides the basis for future theory testing research in the context of scdd and conflict mineral management

an empirical investigation of dynamic ordering policies adaptive base stock policy is a well known tool for managing inventories in nonstationary demand environments this paper presents empirical tests of this policy using aggregate firm level data first we extend a single item adaptive base stock policy in previous literature to a multi item case second we transform the policy derived for the multi item case to a regression model that relates firm level inventory purchases to firm level sales and changes in sales forecasts we focus on two research questions can the adaptive base stock policy explain cross sectional ordering behaviors under sales growth to the extent that the adaptive base stock policy fails to explain ordering behaviors under sales growth are there frictions that explain such a finding our empirical results demonstrate disparities in ordering behaviors between firms experiencing high and moderate sales growth contrary to theoretical prediction this implies that inventory purchases are a function of not only current sales and changes in sales forecast but also past sales growth as potential explanations for this departure from theoretical prediction we show that both future demand dynamics and inventory holding risks depend on past sales growth in addition we find that firms inventory holding risks may also be affected by purchasing constraints imposed by supply chain contracts our results provide managerial implications for practitioners and inform future theoretical research this paper was accepted by martin lariviere operations management

can the production smoothing model of inventory behavior be saved the production smoothing model of inventory behavior has a long and venerable history and theoretical foundations that seem very strong yet certain overwhelming facts seem not only to defy explanation within the production smoothing framework but actually to argue that the basic idea of production smoothing is all wrong most prominent among these is the fact that the variance of detrended production exceeds the variance of detrended sales this paper first documents the stylized facts then it derives the production smoothing model rigorously and explains how the model can be amended to make it consistent with the facts finally it reviews the theoretical and empirical evidence and tries to draw some tentative conclusions

the financial impact of iso 14001 certification top line bottom line or both it is not easy being green but it does beg the question does being green pay off on the bottom line unfortunately that question of becoming iso 14001 to reap financial benefit remains widely unanswered in particular corporate practice is interested in how environmental management impacts firms finance through top line impact bottom line impact or both as this paves the way for an investment of environmental management as current findings are mixed our study tracks financial performance of publicly traded us firms between 1996 and 2005 to test whether iso 14001 leads to improved financial performance employing a rigorous event study approach we compare certified firms to different control groups based on several matching criteria that include industry size and or roa in the short run iso 14001 certification makes only a minor impact on the bottom line according to our results however these same results show a significant financial improvement over the long haul with iso 14001 certification additionally this long term improvement also makes a significant improvement in top line performance thus we conclude that environmental management pays off along both dimensions