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Capital Utilization and the Amplification Mechanism

Listed author(s):
  • Villa Stefania

    ()

    (KU Leuven and University of Foggia)

Different modeling techniques have been proposed in the literature to solve the issue of amplification in response to shocks in Dynamic Stochastic General Equilibrium (DSGE) models. This paper analyzes the impact of variable capital utilization on the amplification mechanism of productivity shocks. It builds a DSGE model which includes a link between capital utilization and shiftworking, consistently with the empirical literature. This paper shows that capital utilization cannot be the main mechanism which amplifies the effects of the shocks hitting the economy.

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Article provided by De Gruyter in its journal The B.E. Journal of Macroeconomics.

Volume (Year): 12 (2012)
Issue (Month): 1 (September)
Pages: 1-22

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Handle: RePEc:bpj:bejmac:v:12:y:2012:i:1:n:30
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