Inventory Behavior in Durable-Goods Manufacturing: The Target-Adjustment Model

Alan J. Auerbach and

Alan J. Auerbach Robert D. Burch Professor of Economics and Law - Economics Department, UC-Berkeley, Director - Robert D. Burch Center for Tax Policy and Public Finance

Martin S. Feldstein

MSF

Martin S. Feldstein NBER and Harvard University

Michael C. Lovell and

MCL

Michael C. Lovell

Robert E. Hall

Robert E. Hall Robert and Carole McNeil Joint Hoover Senior Fellow and Professor of Economics - Stanford University

THE RECENT problems of inflation and of a seemingly permanent high rate
of unemploymenth ave caused a virtual neglect of research on cyclical
fluctuations in demand. Yet even a cursory review of the past twenty years
uncovers a familiar pattern of repeated expansion and contraction of industrial
production with concomitant changes in employment, capacity
utilization, profits, and the like.