| Abstract: | In an inventory model with exogenous sales, FIFO and LIFO criteria are formalized and compared with national account estimates for intermediate and finished good products. The model is simulated by utilizing manufacturing input and output prices for Italy (1970–88). LIFO and national account estimates of inventory are usually close and also imply reliable measures of output level and changes which can be shown by solving the quantity model. Conversely, FIFO exhibits larger profits and leads in real terms to unsatisfactory estimates of output changes. |
