rates generates dynamics between growth and distribution that results in a long-run variation in the capacity utilization … rate. The model developed here generates oscillations in the rate of capacity utilization in the short run before settling … down to its long-run value. Furthermore, the long-run value of the rate of capacity utilization falls within a range of …

distribution, represented by the trajectory of the labor share of income, and economic activity, as measured by capacity … utilization. The results obtained show that potential output growth exhibits a gradual decline that predates the Great Recession …

evaluate whether capacity utilization is endogenous to demand is weak for the following reasons: (i) The Federal Reserve Board … utilization rate is not consistent with any theory of the determination of capacity utilization. Even if demand did not play a …