Estimating normal capacity utilization rates and their tolerable ranges of values: A comment on Setterfield
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5 juillet 2017
- handle: 10670/1.jwci6f
- hal: hal-01543643
http://creativecommons.org/licenses/by-nc-nd/ , info:eu-repo/semantics/OpenAccess
Mots-clés
Normal rate of capacity utilization Harrodian instability Kaleckian growth theory E - Macroeconomics and Monetary Economics/E.E1 - General Aggregative Models/E.E1.E11 - Marxian • Sraffian • Kaleckian E - Macroeconomics and Monetary Economics/E.E1 - General Aggregative Models/E.E1.E12 - Keynes • Keynesian • Post-Keynesian O - Economic Development, Innovation, Technological Change, and Growth/O.O4 - Economic Growth and Aggregate Productivity/O.O4.O41 - One, Two, and Multisector Growth Models E - Macroeconomics and Monetary Economics/E.E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy/E.E2.E22 - Investment • Capital • Intangible Capital • Capacity E - Macroeconomics and Monetary Economics/E.E3 - Prices, Business Fluctuations, and Cycles/E.E3.E32 - Business Fluctuations • CyclesSujets proches
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Florian Botte, « Estimating normal capacity utilization rates and their tolerable ranges of values: A comment on Setterfield », HAL-SHS : économie et finance, ID : 10670/1.jwci6f
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Résumé
Taking the potential instability of the Kaleckian model of growth as his starting point, Setterfield (2017) investigated, inter alia, the possibility of taming the Harrodian instability. His investigation used a range of tolerable values, rather than a unique value, for the normal rate of capacity utilization. After illustrating his point theoretically, Setterfield then proposes empirical methods to estimate the normal capacity utilization rate and the corresponding tolerance range. This paper suggests improved methods to estimate the normal rate of capacity utilization and its tolerance range. The proposed alternative solutions offer better consistency with Post-Keynesian behavioral theories, and the presented exploratory narrative based on these suggestions can partly explain the current stagnation.