Cyclical factor utilization

Mark Bils and Jang-Ok Cho

No 79, Discussion Paper / Institute for Empirical Macroeconomics from Federal Reserve Bank of Minneapolis

Abstract: We introduce procyclical labor and capital utilization, as well as costs of rapidly increasing employment, into a business-cycle model. Plausible variations in factor utilization enable us to explain observed variability of real GNP with considerably smaller economy-wide disturbances. The costs of adjustment create very interesting and realistic lead and lag relationships: Employment does not peak until a full quarter after output; workweeks, effort, capital utilization, and productivity all sharply lead the business cycle.

Keywords: Business; cycles (search for similar items in EconPapers)
Date: 1993
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Citations: View citations in EconPapers (4)

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Journal Article: Cyclical factor utilization (1994)
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