F. Owen Irvine

Long term trends in US inventory to sales ratios

Abstract In contrast to earlier studies, we find that inventory holding in the US has become much more efficient since the mid-1980s. This result is found by examining trends in fixed weight aggregate inventory to sales ratios rather than traditional inventory to sales ratios, whose trends are shown to have been distorted by shifts in the composition of sales towards sectors carrying heavier stocks. Nearly all of the reductions in inventory holdings relative to sales are found to have occurred in sectors carrying durable goods. The adoption of just-in-time (JIT) and other inventory control systems by Durable Manufacturers is shown to have greatly reduced their inventory holdings.

Saving behavior of older households: Rate-of-return, precautionary and inheritance effects

Abstract We estimate a model of household saving behavior using data from a panel of men nearing retirement age. We seek and find statistically significant rate-of-return, precautionary and intergenerational-transfer effects embedded within a retirement-consumption life-cycle model.

Problems with using traditional aggregate inventory to sales ratios

Abstract Changes in traditionally constructed aggregate inventory to sales ratios are shown to not necessarily measure changes in underlying subsector inventory behavior. This is because while traditionally constructed aggregate inventory to sales ratios can be viewed as the weighted average of the underlying subsector inventory to sales ratios, the aggregation weights vary over time reflecting shifts in the composition of sales across the subsectors. For example, aggregate ratios can increase when most of the underlying subsectors are reducing inventory to sales ratios; this is shown to have been the case for the US Retail Sector. As a solution to this measurement problem, the use of fixed weight aggregate inventory sales ratios is proposed. These should help business cycle analysts and researchers better gauge the condition of inventories.

Did financial deregulation help consumers? Access to market-yield instruments

US financial deregulation was theoretically supposed to help consumers by making it possible for a larger number of households to earn a market (unregulated) rate of interest on their savings. Empirical evidence is presented which shows that by 1983 only one quarter of US households had gained access to market-yield instruments. Three quarters of all US households had not been able or willing to open any type of market-yield account. This analysis suggests that minimum-balance requirements were the biggest obstacle (other than poverty) preventing households from gaining access to market-yield accounts