Capital Utilization and the Amplification Mechanism

Stefania Villa

The B.E. Journal of Macroeconomics, 2012, vol. 12, issue 1, 22

Abstract: Different modeling techniques have been proposed in the literature to solve the issue of amplification in response to shocks in Dynamic Stochastic General Equilibrium (DSGE) models. This paper analyzes the impact of variable capital utilization on the amplification mechanism of productivity shocks. It builds a DSGE model which includes a link between capital utilization and shiftworking, consistently with the empirical literature. This paper shows that capital utilization cannot be the main mechanism which amplifies the effects of the shocks hitting the economy.

Keywords: real business cycle model; capital utilization; shiftworking (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (3)

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DOI: 10.1515/1935-1690.2341

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