Inventory Investment

  • Ajit K. Dasgupta
  • A. J. Hagger


Among the data of Model IV are three variables which were placed in the data category as a temporary measure only, namely I ri (desired real investment in inventories of raw materials and work-in-progress), I ci (desired real investment in inventories of finished goods) and U (undesired real disinvestment in inventories). The main purpose of the present chapter is to develop relationships which will explain these variables and which will enable us to transfer them from the data category to the jointly determined category where they rightly belong.


Actual Inventory Disposable Income Finished Good Excess Demand Consumer Attitude 
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Reading List

  1. Ball, R. J., and Drake, Pamela S., ‘Stock Adjustment Inventory Models of the United Kingdom Economy’, Manchester School of Economic and Social Studies (May 1963).Google Scholar
  2. Feinstein, C. H., ‘Stockbuilding, Expenditure and the Balance of Payments’, Times Review of Industry (Dec 1962).Google Scholar
  3. Feinstein, C.H.,‘Stocks, Sales and Stockbuilding’, Times Review of Industry and Technology (Mar 1963).Google Scholar
  4. Johnston, J., ‘An Econometric Study of the Production Decision’, Quarterly Journal of Economics (May 1961).Google Scholar
  5. Lovell, M., ‘Manufacturers’ Inventories, Sales Expectations, and the Acceleration Principle’, Econometrica (July 1961).Google Scholar
  6. Metzler, L. A., ‘The Nature and Stability of Inventory Cycles’, Review of Economics and Statistics (Aug 1941).Google Scholar
  7. Modigliani, F., ‘Business Reasons for Holding Inventories and their Macroeconomic Implications’, in Problems of Capital Formation: Concepts, Measurement and Controlling Factors, Studies in Income and Wealth, vol. 19 (National Bureau of Economic Research, Princeton University Press, 1957).Google Scholar
  8. Nevile, J. W., ‘Forecasting Inventory Investment’, Economic Record (June 1963).Google Scholar

Copyright information

© Ajit K. Dasgupta and A. J. Hagger 1971

Authors and Affiliations

  • Ajit K. Dasgupta
    • 1
  • A. J. Hagger
    • 2
  1. 1.Sir George Williams UniversityMontrealCanada
  2. 2.University of TasmaniaAustralia

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