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Lefteris Tsoulfidis and Theologos Dergiades
''Estimating Capacity Utilization Using a SVAR Model: An Application to the US and Canadian Economies''
( 2007, Vol. 5 No.4 )
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.
Keywords: Capacity Utilization
JEL: E3 - Prices, Business Fluctuations, and Cycles: General (includes Measurement and Data)
C2 - Single Equation Models; Single Variables: General
Manuscript Received : Nov 27 2006 Manuscript Accepted : Feb 21 2007

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