FINISHED PRODUCT INVENTORIES AND PRICE EXPECTATIONS IN THE SOFTWOOD LUMBER INDUSTRY

A monthly model is presented of the U.S. softwood lumber sector. Price expectations and beginning-period inventories have important roles in producers' production, sales, and inventory decisions. Cross-price ef fects among domestic producing regions are minimal. However, there is substantial competition between U.S. and Canadian producers. Our model produces supply elasticities, demand elasticities, and inventory resp onse parameters that are different from and more comprehensive than th ose obtained in previous work.