Research On The Correlation Between Inventory Investment And Macroeconomic Fluctuation

As the difference of current total output and total sales,inventory investment is one of the components of GDP.besides,as an important part of capital formation,inventory investment have a certain influence on social production,price and other economic indicators.The existing economic studies suggest that inventory investment and inventory cycle is an important indicator for measuring and predicting economic output fluctuations and economic cycle changes.Alan Blind(1991)shows that the contribution of the volatility of inventory investment to real GDP fluctuation is about 30%.In his view,to thoroughly understand the economic cycle,the behavior of the inventory cycle must be analyzed and explained first,because to a certain extent,the cyclical fluctuations in the inventory investment will affect the cyclical fluctuations in the economy as a whole.Existing research shows that inventory investment generally presents a procyclical feature,and the volatility of inventory investment is greater than that of GDP,and inventory investment has a magnifying effect on the economic cycle,especially during the recession.The effect of inventory investment on macroeconomic volatility is " making worse" rather than "making better",and when the economy is in a downturn,the volatility of inventory investment is greater,that is to say,inventory investment plays a role in making macroeconomic moves"unstable".With the development of China's economy into the new normal state,China's economic development has shown a series of new features.In this context,it is very important to study the fluctuation characteristics of inventory investment and the relationship between inventory investment fluctuation and macroeconomic fluctuation.In this paper,we take the relationship between inventory investment and macroeconomic fluctuation as the starting point,and analyze the fluctuation ch aracteristics of inventory investment,China's inventory structure and the relatio nship between inventory investment and macroeconomic fluctuation from the macro,medium and micro perspectives.We can get the following main conclusions:(1)Under the macro perspective,inventory investment has a strong correlation with GDP,and the fluctuation of inventory investment has far greater contribution to GDP fluctuation than its share in GDP,showing obvious asymmetry.In the view of medium view,we study the proportion of inventories in industry,wholesale and retail trade and the proportion in inventory investment fluctuates.It is found that China's inventory structure is very different from that of the United States,which is different from that American manufacturing industry,wholesale and retail trade present a"one-third of the world" pattern.China's industrial inventory present a "a dominance"pattern,which accounted for more than 70%in the total inventory investment,followed by the wholesale trade,the retail trade accounted for the lowest.Under the micro perspective,based on the analysis of the production index,finished goods inventory index and raw material inventory index under the PMI index,it is found that the raw material inventory index shows a significant procyclicality,while the finished goods inventory index shows the opposite reverse cycle nature.That is to say,the two show the opposite nature of the cycle.(2)By establishing a vector error correction model of inventory investment and GDP,it is found that the fluctuation of short-term GDP has a significant effect on inventory investment,and the fluctuation of inventory investment has no significant effect on GDP.However,with the extension of the lag,the impact of GDP on inventory investment is gradually weakened,and the impact of inventory investment on GDP tends to increase.At the same time,we found that in the short term,the inventory investment may have a reverse cycle,while the long-term inventory investment tends to be pro-cyclical.(3)By establishing a fixed influence variable coefficient model for 41 industry Panel Data in our country,we find that in 41 industries that are included in the Panel Data model,more than 40 per cent of the industries are shown to be inventory sensitive,inventory sensitive to finished products and sensitive to non-production inventory,which is that inventory changes have an important effect on economic fluctuations.About 60 percent of the industry's inventory has a positive effect on economic fluctuations,suggesting that inventory fluctuations make the economy more volatile.Finally,this paper analyzes the rich policy implications of the above research conclusions.The main innovation points of this paper are as follows:(1)From the quantitative analysis of China's inventory structure,drawing on the United States inventory composition study,this paper analyzes the inventory ratio of Chinese industry,wholesale and retail trade and their contribution to the inventory investment fluctuations,so that we can have a clearer understanding on the industry composition of inventory investment,and make up for the lack of domestic research in this area.(2)Based on the cointegration analysis and vector error correction model,this paper analyzes the relationship between logarithmic inventory investment and logarithmic GDP in China,and analyzes the long-term and short-term changes between the two,which help us to have a quantitative understanding of the volatility of the two.(3)Based on the establishment of the Panel Data model in 41 industries in China,this paper analyzes the volatility of the stocks of industrial enterprises which have a significant impact on the economic fluctuation,and provides a specific direction for the government to monitor the inventory changes.