Seasonality and the production-smoothing model

Seasonality and the production-smoothing model

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Article ID: iaor20011141
Country: Netherlands
Volume: 65
Issue: 2
Start Page Number: 173
End Page Number: 178
Publication Date: Jan 2000
Journal: International Journal of Production Economics
Authors: ,
Keywords: production
Abstract:

The debate over whether firms smooth production relative to demand continues. In this paper we find that results obtained by Blinder and Blinder and Maccini, indicating that firms do not smooth production, are greatly influenced by the seasonal adjustment of the Census data for US manufacturing. Using seasonally adjusted data, we find significant evidence of production smoothing in 10 of 14 manufacturing industries for the years 1982–1997. Further, the prevalence of production smoothing has increased over time, which we attribute either to fundamental changes in the collection of the data or to the advent of improved methods of inventory management.

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