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BPEA Article

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



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.



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