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Inventories and Imports

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Many economists believe that the current cooling in economic activity largely reflects an inventory correction that will pass fairly quickly and painlessly. Two observations support this prognosis. First, businesses have managed their inventories closely, fostering a general decline in the ratio of inventories to sales since the early 1980s. Because manufacturers reacted quickly when the ratio began to rise last year, the necessary correction might be less extensive than it often has been in the past.

Suggested citation: "Inventories and Imports," Federal Reserve Bank of Cleveland, Economic Trends, no. 01-04, pp. 08, 04.01.2001.

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