On a dual measure of the utilization rate of capital

Article type: Research Article

Authors: Durand, René^a

Affiliations: [a] Industry Canada, 235 Queen Street, room # 538G, Ottawa, Ontario, Canada K1A 0H5. Tel.: +1 613 954 3494; Fax: +1 613 941 3859; E-mail: [email protected]

Abstract: The measurement of capital services remains one of the most difficult task for growth accountants despite the breakthrough developments made over the last four decades and, in particular, following the numerous suggestions made to correct the measure of capital services for changes in capacity utilization. Building upon the work of Berndt and Fuss [1], this paper attempts to contribute to the latter issue. Establishing a parallel with the labour input, the author derives a formal measure for the rate of capacity utilization of capital which is based on observable dual price variables.

Keywords: utilization rate, capacity, capital services, quasi-fixed inputs, growth accounting, productivity

DOI: 10.3233/JEM-2003-0209

Journal: Journal of Economic and Social Measurement, vol. 28, no. 4, pp. 177-185, 2003