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Estimating Capacity Utilization Using a SVAR Model: An Application to the US and Canadian Economies

Author

Listed:
  • Lefteris Tsoulfidis

    (University of Macedonia)

  • Theologos Dergiades

    (University of Macedonia)

Abstract

This paper develops a method for the estimation of the rate of capacity utilization based on standard growth theory and the Structural VAR estimating technique. The measures of capacity utilization we derive for the US and Canadian economies are compared with widely-used survey measures. We show that the degree of association and synchronization of the two measures for both economies is pretty high, a result that encourages the use of our method as a reliable alternative.

Suggested Citation

  • Lefteris Tsoulfidis & Theologos Dergiades, 2007. "Estimating Capacity Utilization Using a SVAR Model: An Application to the US and Canadian Economies," Economics Bulletin, AccessEcon, vol. 5(4), pages 1-12.
    • Handle: RePEc:ebl:ecbull:eb-06e30004
    as

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    References listed on IDEAS

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    More about this item

    Keywords

    Capacity Utilization;

    JEL classification:

    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
    • C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables

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