Journal of Monetary Economics 2014 DOI: 10.1016/j.jmoneco.2014.07.010 View full text
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Felipe Schwartzman

Abstract: The inventory/cost ratio is a measure of the time to produce and distribute goods ("time to produce") and, therefore, an important determinant of working capital demand. In the aftermath of emerging market crises, manufacturing industries with higher inventory/cost ratios experienced a larger drop in output, a drop which persisted multiple years into the recovery. This observation is shown to emerge following a persistent foreign interest rate shock in an environment where time to produce in different sectors …

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