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Gauging the performance of the linear-quadratic inventory model

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Abstract:

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.

Document Type: Research Article

DOI: http://dx.doi.org/10.1080/00036840500118317

Affiliations: Department of Economics, Indiana University–Purdue University Indianapolis, 425 University Boulevard, Indianapolis, IN 46202, USA, Email: dbivin@iupui.edu

Publication date: June 20, 2005

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