NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

The Effects of Variable Capital Utilization on the Measurement and Properties of Sectoral Productivity: Some International Evidence

Marianne Baxter, Dorsey D. Farr

NBER Working Paper No. 8475
Issued in September 2001
NBER Program(s):   EFG   ITI   PR

This paper explores how accounting for variations in factor utilization rates alters the empirical characteristics of productivity residuals in the United States and Canada. Using data on 19 manufacturing industries, we study the behavior of productivity using three proxies for capital services. We find that adjusting for cyclical movements in capital utilization alters many of the empirical characteristics of productivity, both within and across countries.

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Document Object Identifier (DOI): 10.3386/w8475

Published: Baxter, Marianne and Dorsey D. Farr. "Variable Capital Utilization And International Business Cycles," Journal of International Economics, 2005, v65(2,Mar), 335-347.

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