The Roles of Comovement and Inventory Investment in the Reduction of Output Volatility.

The article presents a study that investigates the role of comovement and inventory investment in the reduction of the gross domestic product volatility in the U.S. The researcher uses the standard factor model and the heterogeneous-agent vector autogression as a methods of research which is appropriate in determining the effects of the reduction. The findings of the study shows that the reduction is pointed out to the decline in comovement of output among industries that holds inventories.