negative correlation between government purchases of durable goods and private sector
inventories, when the former are recorded under the payment or delivery methods (see
section 3, page 8). This could contribute to the small or negative effect on private investment
at 1 year (the effect in the very first quarter - not shown in Table 13 - is also negative
in all countries and all periods). In addition, in the short run the negative response of
private investment might simply reflect the fact that private firms run down inventories
to meet an unexpected increase in government demand. Panel C of Table 13 displays the
same information as Panel B, except that private inventories are excluded from private
investment (Germany does not have separate data for private inventories).