Capacity Utilization

Corrado, Carol; Mattey, Joe P.

doi:10.1257/jep.11.1.151

Cited by 145 publications

(89 citation statements)

References 9 publications

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“…The findings from such studies have been mixed. For the United States, some have found little evidence that foreign capacity utilisation has a significant impact on domestic inflation (Corrado and Mattey, 1997;Tootell, 1998), but others have come to the opposite conclusion (Gamber and Hung, 2001). More recent multi-country studies also yielded mixed results.…”

Section: The Influence Of Foreign Capacity On Domestic Inflationmentioning

confidence: 99%

Globalisation and OECD consumer price inflation

Pain¹,

Koske²,

Sollie³

2008

OECD Journal: Economic Studies

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Over the past 25 years inflation has moderated considerably in all OECD economies. At the same time, the production of many goods and services has become increasingly internationalised and the level of trade between the OECD and non-OECD economies has risen markedly. This paper investigates the extent to which the observed changes in the inflation process can be attributed to the increasing integration of non-OECD economies into the global economy. The results of the analysis show that i) import prices have become a more important driver of domestic consumer prices since the mid-1990s; ii) the sensitivity of inflation to domestic economic conditions has declined whereas the sensitivity to foreign economic conditions has risen, working through import prices; and iii) the strong GDP growth in the non-OECD economies over the past five years has contributed to the growth of real oil and metals prices. A scenario analysis shows that globalisation has put upward pressure on inflation via higher commodity prices and downward pressure via lower non-commodity import prices with the latter effect having dominated in most OECD economies.

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Section: The Influence Of Foreign Capacity On Domestic Inflationmentioning

confidence: 99%

Globalisation and OECD consumer price inflation

Pain¹,

Koske²,

Sollie³

2008

OECD Journal: Economic Studies

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“…This seems in contrast with the empirical evidence, which suggests that the depreciation of capital goods is time dependent. 11 In addition, as argued by Corrado and Mattey (1997) and Burnside, Eichenbaum, and Rebelo (1995), capacity utilization seems to have pronounced cyclical variability. While Kydland and Prescott (1988) and Ambler and Paquet (1994) introduced respectively stochastic capital utilization and depreciation rate, other authors (as Wen (1998) and Harrison and Weder (2002)) extend the RBC models assuming capacity utilization to be a convex, increasing function of the depreciation rate.More recently, some macro models have employed adjustment costs proportional to the growth rate of investment (Christiano, Eichenbaum, and Evans (2005)).…”

Section: Measurement Error Depreciation and Capital Utilizationmentioning

confidence: 95%

Solow residuals without capital stocks

Burda

Severgnini

2014

Journal of Development Economics

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For more than fifty years, the Solow decomposition (Solow 1957) has served as the standard measurement of total factor productivity (TFP) growth in economics and management, yet little is known about its precision, especially when the capital stock is poorly measured. Using synthetic data generated from a prototypical stochastic growth model, we explore the quantitative extent of capital measurement error when the initial condition is unknown to the analyst and when capacity utilization and depreciation are endogenous. We propose two alternative measurements which eliminate capital stocks from the decomposition and significantly outperform the conventional Solow residual, reducing the root mean squared error in simulated data by as much as two-thirds. This improvement is inversely related to the sample size as well as proximity to the steady state. As an application, we compute and compare TFP growth estimates using data from the new and old German federal states.

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“…We allow utilization to slightly exceed a value of 1.0 for short periods, consistent with the Federal Reserve definition of utilization as output relative to sustainable, rather than absolute, maximum output (Corrado and Mattey 1997). Nevertheless, even with this modest flexibility, utilization is highly constrained.…”

Section: Stability Connection and Coordinationmentioning

confidence: 99%

Downshifting in the Fast Lane: A Post-Keynesian Model of a Consumer-Led Transition

Kemp-Benedict

Ghosh

2018

Economies

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Abstract:If the world's countries seriously tackle the climate targets agreed upon in Paris, their citizens are likely to experience substantial changes in production, consumption, and employment. We present a long-run post-Keynesian model for studying the potential implications of a major transition on macroeconomic stability and employment. It is a demand-led model in which firms have considerable but not absolute freedom to administer prices, while household consumption exhibits inertia. Firms continually seek input-saving technological improvements that, in aggregate, tie technological progress to firms' cost structures. Together with firm pricing strategies and wage setting, the productivities of different inputs determine the functional income distribution. Saving and investment, and production and purchase of consumption goods, are undertaken by different economic actors, driven by income and capacity utilization, with the possibility that productive capacity exceeds, or falls short of, effective demand. The model produces business cycles and long waves driven by technological change. We present results for a "downshifting" scenario in which households voluntarily withdraw labor, and discuss the implications of downshifting for stability, growth, and employment. We contrast the downshifting scenario with ones in which households reduce consumption without withdrawing from the labor pool.

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Capacity Utilization

Cited by 145 publications

References 9 publications

Globalisation and OECD consumer price inflation

Globalisation and OECD consumer price inflation

Solow residuals without capital stocks

Downshifting in the Fast Lane: A Post-Keynesian Model of a Consumer-Led Transition

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