Article1997

Capacity Utilization

165 citations0/0 files storedThe Journal of Economic Perspectives

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Monetary Policy and Economic Impact Economic Theory and Policy Economic Growth and Productivity

Abstract

This article reviews how the Federal Reserve measures capacity utilization and explains why capacity utilization has been, and likely will remain, a useful indicator of inflationary pressures and business cycle fluctuations. The authors also explain why economic developments, such as the pace of technological change, increased international trade, and a shift in the share of the workforce to service-producing industries, have not substantially affected the indicator value of capacity utilization. A microtheoretic description of the concept of capacity utilization is offered. Evidence on the plausibility of microeconomic structural interpretations of the relation between capacity utilization and price changes is reviewed.

Citations in this library

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References

1988The Relation between Price and Marginal Cost in U.S. Industry 1989Exchange Rate Pass-Through in the 1980s: The Case of U.S. Imports of Manufactures

Cited by

2012When Does Employee Turnover Matter? Dynamic Member Configurations, Productive Capacity, and Collective Performance 2010Some instability puzzles in Kaleckian models of growth and distribution: a critical survey 2010HARRODIAN INSTABILITY AND THE ‘NORMAL RATE’ OF CAPACITY UTILIZATION IN KALECKIAN MODELS OF DISTRIBUTION AND GROWTH—A SURVEY 2011Offshoring Bias in U.S. Manufacturing 2011Oil, Automobiles, and the U.S. Economy: How Much Have Things Really Changed?2012The Imaclim-R model: infrastructures, technical inertia and the costs of low carbon futures under imperfect foresight 2006The process management triangle: An empirical investigation of process trade‐offs 2015On the ‘utilisation controversy’: a theoretical and empirical discussion of the Kaleckian model of growth and distribution

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