Towards an explanation of a declining trend in capacity utilisation in the US economy

Santiago Gahn

No PKWP2214, Working Papers from Post Keynesian Economics Society (PKES)

Abstract: In this paper I analyse a declining trend of effective capacity utilisation in the United States. After identifying determinants of normal capacity utilisation in the literature, I find that this declining trend of the FRB’s capacity utilisation is also present in the output-capital ratio of the NBER-CES sectoral database since 1958. Results suggest that permanent changes on technical change (K/L), distribution (W/Y ) and output have transitory effects on the output-capital ratio, my proxy of effective capacity utilisation.

Keywords: capacity utilisation; technical change; income distribution; Panel Structural VAR (search for similar items in EconPapers)
JEL-codes: B50 E11 E22 O41 O47 (search for similar items in EconPapers)
Pages: 24
Date: 2022-05
New Economics Papers: this item is included in nep-eff, nep-gro, nep-hme and nep-mac
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