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Notes on the accumulation and utilization of capital: Some empirical issues

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  • Michalis Nikiforos

Abstract

The paper makes three contributions. First, it provides an in‐depth examination of the Federal Reserve measure of capacity utilization and shows that it is closer to a cyclical indicator than a measure of long‐run variations of normal utilization. Other measures, such as the Average Workweek of Capital or the National Emergency Utilization Rate are more appropriate for examining long‐run changes in utilization. Second, and related to that, it argues that a relatively stationary measure of utilization is not consistent with any theory of the determination of utilization. Third, based on data on the lifetime of fixed assets it shows that for the issues around the “utilization controversy” the long run is a period after thirty years or more. This makes it a platonic idea for some economic problems.

Suggested Citation

  • Michalis Nikiforos, 2021. "Notes on the accumulation and utilization of capital: Some empirical issues," Metroeconomica, Wiley Blackwell, vol. 72(4), pages 679-695, November.
    • Handle: RePEc:bla:metroe:v:72:y:2021:i:4:p:679-695
    DOI: 10.1111/meca.12339
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    References listed on IDEAS

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    6. Michalis Nikiforos, 2020. "Notes on the Accumulation and Utilization of Capital: Some Theoretical Issues," Economics Working Paper Archive wp_952, Levy Economics Institute.
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    9. Michalis Nikiforos, 2020. "Notes on the Accumulation and Utilization of Capital: Some Empirical Issues," Economics Working Paper Archive wp_953, Levy Economics Institute.
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    20. Michalis Nikiforos, 2020. "On the ‘utilisation controversy’: a rejoinder and some comments," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 44(3), pages 709-722.
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    1. Santiago José Gahn & Alejandro González, 2022. "On the empirical content of the convergence debate: Cross‐country evidence on growth and capacity utilisation," Metroeconomica, Wiley Blackwell, vol. 73(3), pages 825-855, July.
    2. Michalis Nikiforos, 2023. "Notes on the accumulation and utilization of capital: Some theoretical issues," Metroeconomica, Wiley Blackwell, vol. 74(1), pages 223-247, February.
    3. Santiago J. Gahn, 2022. "Towards an explanation of a declining trend in capacity utilisation in the US economy," Working Papers PKWP2214, Post Keynesian Economics Society (PKES).
    4. Jose Barrales‐Ruiz & Rudiger von Arnim & Mikidadu Mohammed, 2023. "Income distribution and economic activity: A frequency domain causal exploration," Metroeconomica, Wiley Blackwell, vol. 74(2), pages 306-327, May.
    5. Santetti, Marcio & Nikiforos, Michalis & von Arnim, Rudiger, 2024. "Growth, cycles, and residential investment," Structural Change and Economic Dynamics, Elsevier, vol. 69(C), pages 313-327.
    6. de Oliveira, Guilherme, 2023. "On the utilization controversy in the demand-led growth literature: A quantile unit root approach," Economic Modelling, Elsevier, vol. 126(C).

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