Measuring capacity utilisation in the italian manufacturing sector: a comparison between time series and survey estimates

Marco Malgarini () and Antonio Paradiso ()

OECD Journal: Journal of Business Cycle Measurement and Analysis, 2012, vol. 2012, issue 2, 5-19

Abstract: The aim of this paper is to provide an interpretation of the measure of capacity utilisation provided by the European Union harmonised survey on the Italian manufacturing sector. In doing so, we evaluate its ability to correctly track cyclical turning points and its contribution in explaining consumer price index (CPI) inflation. The survey based measure results are a good co-incident indicator of business cycle, however it is generally outperformed by time series models in explaining inflation. We conclude that the standard “output gap” interpretation of the survey results is broadly confirmed by the data, however we cannot rule out at this stage that survey respondents may also consider the alternative “variable capacity utilisation” concept in answering the survey question. Keywords: Capacity utilisation, co-integration, unobserved component models, VAR.JEL Classification: E32, C22, E37

Date: 2012
References: Add references at CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://doi.org/10.1787/jbcma-2012-5k8znwp2nts8 (text/html)
Full text available to READ online. PDF download available to OECD iLibrary subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oec:stdkab:5k8znwp2nts8

Access Statistics for this article

More articles in OECD Journal: Journal of Business Cycle Measurement and Analysis from OECD Publishing, Centre for International Research on Economic Tendency Surveys Contact information at EDIRC.
Bibliographic data for series maintained by ().