Effective demand, exogenous normal utilization and endogenous capacity in the long run. Evidence from a CVAR analysis for the US

Christian Schoder

No 103-2012, IMK Working Paper from IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute

Abstract: Using the Cointegrated VAR framework, we provide evidence for the US manufacturing sector that the principle of effective demand in a growth context, by which a permanent demand shock has a permanent growth effect, is consistent with the stylized fact of a stationary rate of capacity utilization, since production capacities adjust endogenously to current output.

Keywords: effective demand; stationary utilization rate; endogenous capacity; cointegrated vector autoregression (search for similar items in EconPapers)
JEL-codes: C22 E12 E22 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2012
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Citations: View citations in EconPapers (2)

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Working Paper: Effective demand, exogenous normal utilization and endogenous capacity in the long run. Evidence from a CVAR analysis for the US (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:imk:wpaper:103-2012

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