This website uses cookies.

By clicking the "Accept" button or continuing to browse our site, you agree to first-party and session-only cookies being stored on your device to enhance site navigation and analyze site performance and traffic. For more information on our use of cookies, please see our Privacy Policy.

  1. Home
  2. Journals
  3. Journal of Economic Perspectives
  4. Winter 1997
  5. Capacity Utilization

Journal of Economic Perspectives

ISSN 0895-3309 (Print) | ISSN 1944-7965 (Online)

Capacity Utilization

  • Carol Corrado
  • Joe Mattey
Journal of Economic Perspectives
vol. 11, no. 1, Winter 1997
(pp. 151–167)
Download Full Text PDF
(Complimentary)

Abstract

This article reviews how the Federal Reserve measures capacity utilization and explains why capacity utilization has been, and likely will remain, a useful indicator of inflationary pressures and business cycle fluctuations. The authors also explain why economic developments, such as the pace of technological change, increased international trade, and a shift in the share of the workforce to service-producing industries, have not substantially affected the indicator value of capacity utilization. A microtheoretic description of the concept of capacity utilization is offered. Evidence on the plausibility of microeconomic structural interpretations of the relation between capacity utilization and price changes is reviewed.

Citation

Corrado, Carol, and Joe Mattey. 1997. "Capacity Utilization." Journal of Economic Perspectives, 11 (1): 151–167. DOI: 10.1257/jep.11.1.151

JEL Classification

  • E22 Capital; Investment; Capacity
There are no comments for this article.
Login to Comment