TY  - JOUR
AU  - Miron,Jeffrey A.
AU  - Zeldes,Stephen P.
TI  - Production, Sales, and the Change in Inventories:  An Identity That Doesn`t Add Up
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 2765
PY  - 1989
Y2  - December 1989
UR  - http://www.nber.org/papers/w2765
L1  - http://www.nber.org/papers/w2765.pdf
N1  - Author contact info:
Jeffrey A. Miron
Department of Economics
Harvard University
Cambridge, MA 02138
Tel: 781/856-0086
Fax: 617/495-8570
E-Mail: miron@fas.harvard.edu

Stephen P. Zeldes
Graduate School of Business
Columbia University
3022 Broadway, Uris 825
New York, NY 10027-6902
Tel: 212/854-2492
Fax: 212/208-4699
E-Mail: stephen.zeldes@columbia.edu
AB  - We examine two measures of monthly manufacturing production. The first is the index of industrial production; the second is constructed from the accounting identity that output equals sales plus the change in inventories. We show that the means, variances, and serial correlation coefficients of the log growth races differ substantially between the two series, and the cross-correlations between the two seasonally adjusted series are in most cases less than .4. A model of classical measurement error indicates chat in 15 of 20 2-digit industries measurement error accounts for over 35% of the variation in the monthly growth rates of seasonally adjusted industrial production.
ER  -