Document Type
Discussion Paper
Publication Date
2-1-1989
CFDP Number
896
CFDP Pages
21
Abstract
Monthly data in physical units for seven industries are used to examine the production smoothing hypothesis. The results strongly support this hypothesis. Significant effects of expected future sales on current production are found for four industries, and the estimated decision equations for all seven industries imply production smoothing behavior. The previous negative results regarding the hypothesis appear to be due to the use of poor data, particularly the shipments and inventory data of the Department of Commerce.
Recommended Citation
Fair, Ray C., "The Production Smoothing Model Is Alive and Well" (1989). Cowles Foundation Discussion Papers. 1140.
https://elischolar.library.yale.edu/cowles-discussion-paper-series/1140