Wave of chitin (American economist chitin)
Inherent Nanoha in circulation in the economy, it is the inventory investment.
There is a wave called 'chitin circulation' as a representative of the wave of capitalist economy.
A wave of short-term economy say that an average of about 40 months.

Chitin is, by analyzing the variation of the United States, the United Kingdom of the wholesale price, interest rate and the clearing height,
Juglar considerably shorter than wave (the wave of the 10 years before and after the economy) of,
Minimum two years, up to six years, the average three-and-a-half years - and found that there is a wave of the economy of (3 4 years).
This is the view to see the circulation of inventory investment is common.
Excess inventory generated in the hand of the company. The adjustment is required,
The production levels temporarily dropped to reduce inventory.
Then, increase the production and inventory will be up to the proper level position.
Then, also increase the stock because the economy is better.

And, eventually excess inventory occurs.



During the approximately 40 months.



This is the mismatch of supply and demand.

Mismatch of supply and demand
Those of the root that determines the quality of the economy in the market economy,
Is the relationship of supply and demand.
If supply is below demand, supply side can increase the supply.
Economy because revenues increase by the the better.
If reverse to supply Uwamaware demand,
Supply side is not forced to reduce the supply,
Revenue also decreased the economy is bad.



In terms of company business conditions, it is excess inventory,

It is the root and become a source of cost sources.



① it may be necessary to waste disposal.

② must be paid the interest rates.

③ epidemic delay occurs, it does not bind to the sale.

④ can no longer be sold over time, be subject to disposal.

⑤ inventory costs to increase.

⑥ out of labor and management cost of the increase.

⑦ occurrence of increase, the cost of inventory business hours.

⑧ its profit drop due to unreasonable sales.

⑨ pressure and the disadvantage of purchase of cash flow.

⑩ long-term stock by selling drop of occurrence.

⑪ can not be in-house management, the occurrence of costs due to external warehouse management.

⑫ disappointment of new product sales opportunities.

In this way, the increase in inventory,
Disadvantage in the mismatch between supply and demand is a very large factor.







Business cycle due to inventory investment
Mismatch of supply and demand, is the movement of inventory investment that shows symbolically the wave.
The relationship between supply and demand, if you look for the goods, first appears as a movement of the stock.
If the supply is below demand, the suppliers, by reducing the inventory on hand,
To try to satisfy the demand.

Then, to fill the inventory was reduced by increasing the production.
The economy is better in the process, if the increase in demand is more,

It must be increased even stock accordingly.

In this way the process of economic expansion is also in the process going at the same time increase the inventory investment.

If then fed waited Uwa demand,
It will appear in the form of say unsold goods = increase stock on hand of suppliers.
As a supplier, it is necessary to adjust for this excess inventory,
It is requested that suppress the production volume in the following demand to the supplier.
Its economy under the production amount of suppression is recession, demand is further reduced.
If ask to reduce the production volume to decrease more, amount of stock is reduced.
Required amount of stock under that effort is also reduced,



Someday, stock amount is consistent with the required amount of stock.



This is the end of the inventory adjustment.



Then, the circulation of the economic recovery begins.



In such a theory, the wave of the most short economy,
A circulation of inventory investment, which is the reason why the wave of chitin is said to inventory investment circulation.









Features of supply
Many of supply, not of receiving the order
'It will be so much demand.' Based on the forecast of the supplier (expected) that
Supply is often.
Moreover, in from the supplier to the decision-making until the goods and services are supplied to the market,
It will be referred to as forward-looking because a certain period of time it takes.
Also, suppliers are numerous, since make decisions each, independently,
The total amount of the supply is, no one learned, supply the total amount will appear as a result later.



In this way, the supply of the reality in the market,
Is the sum of the prediction regarding the future needs of the individual supplier.
It is, realistically encounter with the demand in the market, consumers (households and individuals, companies, and
It is a reflection of the economic situation and preferences, etc. also including) the government and overseas consumers.



In other words, the mismatch between supply and demand,
But one in which constantly occurring brush year basis in the market economy,
To match, it is large due to the adjustment of the consumer and the supplier.







Adjustment of the mismatch
In economics, the mismatch between supply and demand,
Price is adjusted by vertically.
Supply is suppressed demand by the price goes up if falls below the demand
Demand is consistent. In addition, the supplier if Uwamaware the supply demand
Because lower prices are stimulating new demand supply and demand match.
In many cases, suppliers, by increasing or decreasing the supply amount to try to Hakaro the balance of supply and demand.
That is, if the supply is below demand,
To increase the supply amount is trying to absorb the excess demand.
Choose a supply increase than the price increase,
In many cases, the price increase is because with the risk.
If the price cut to achieve the adjustment,
There is also resistance on the side of the supplier, there is also a limit.

Price cuts reduce the profits of suppliers as a matter of course.
More than a certain amount of the cost of supply is at stake,
The cost is because the wish to recover.
Or In addition, by price cuts, it can evoke much of the new demand?
For the effect, there is a factor to be in doubt.


Therefore, the supplier correspond by reducing the number of cases the supply,
It is a concept that tries to match the demand.

As a recent trend, by abenomics, due to the past of the realistic recognition shortage (local creation site lack of awareness)
To the idea of ​​structural reform, a realistic recognition has been consideration,
The financial administration reform, banks, improvement of the expense ratio, profitability due to new product development,
After the final disposal of bad loans, it will be until the early pay off public funds,
Distrust of banks has become a period that is being trusted. (SCG GROUP, Inc.)

In, What is abenomics? Let's investigate.





next