The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Capital Utilization

  • Roger Betancourt
Reference work entry
DOI: https://doi.org/10.1057/978-1-349-95189-5_201

Abstract

Utilization of capital can take place through variations in the duration of working time, given intensity, or through variations in the intensity of working time, given duration, or both. This article focuses on the economic factors determining duration and discusses the issues affecting and affected by variations in intensity. The latter can take the form of variations in speed or in the use of inputs that are complements to capital relative to some maximum or optimum. We provide a historical perspective, discuss modern theory, its main applications and links to the issues of speed and capacity, and identify important implications.

Keywords

Agency costs Business cycles Capacity utilization Capital utilization Compensating differentials Depreciation Duality Duration Dynamic factor demand models Elasticity of substitution Exploitation General equilibrium Incomplete contracts Leontief production function Market imperfections Marshall, A. Marx, K. H. Monitoring Non-convexity Obsolescence Overtime Partial equilibrium Production function Shift work Shift differential Solow residual Speed Specific-factors models Taxation of corporate profits Technical change Transaction costs Two-sector models Wear and tear Work day of capital Work day of labour 

JEL Classifications

D2 D24 E22 E23 L23 J81 
This is a preview of subscription content, log in to check access.

Bibliography

  1. Anxo, D., G. Bosch, D. Bosworth, G. Cette, T. Sterner, and D. Taddei. 1995. Work patterns and capital utilization: An international comparative study. London: Kluwer Academic Publications.CrossRefGoogle Scholar
  2. Beaulieu, J., and J. Mattey. 1998. The workweek of capital and capital utilization in manufacturing. Journal of Productivity Analysis 10: 199–203.CrossRefGoogle Scholar
  3. Betancourt, R. 1986. A generalization of modern production theory. Applied Economics 18: 915–928.CrossRefGoogle Scholar
  4. Betancourt, R., and C. Clague. 1981. Capital utilization: A theoretical and empirical analysis. New York: Cambridge University Press.CrossRefGoogle Scholar
  5. Betancourt, R., C. Clague, and A. Panagariya. 1985. Capital utilization and factor specificity. Review of Economic Studies 52: 311–329.CrossRefGoogle Scholar
  6. Bresnahan, T., and V. Ramey. 1994. Output fluctuations at the plant level. Quarterly Journal of Economics 108: 593–624.CrossRefGoogle Scholar
  7. Cardellichio, P. 1990. Estimation of production behavior using pooled micro data. The Review of Economic and Statistics 72: 11–18.CrossRefGoogle Scholar
  8. Chatterjee, S. 2005. Capital utilization, economic growth and convergence. Journal of Economic Dynamics and Control 29: 2093–2124.CrossRefGoogle Scholar
  9. Coates, D. 1991. Endogenous capital utilization and taxation of corporate capital. National Tax Journal 44: 79–91.Google Scholar
  10. Das, S. 1992. A micro-econometric model of capital utilization and retirement: The case of the US cement industry. Review of Economic Studies 59: 277–297.CrossRefGoogle Scholar
  11. de Leeuw, F. 1979. Why capacity utilization rates differ. In Measures of Capacity Utilization: Problems and Tasks, ed. F. de Leeuw, et al. Staff Studies No. 105. Washington, DC: Board of Governors of the Federal Reserve System.Google Scholar
  12. Foss, M. 1981. Long-run changes in the workweek of fixed capital. American Economic Review, Papers and Proceedings 71: 58–63.Google Scholar
  13. Garcia Sanchez, A., and M. Vazquez Mendez. 2005. The timing of work in a general equilibrium model with shiftwork. Investigaciones Economicas 29: 149–179.Google Scholar
  14. Georgescu-Roegen, N. 1972. Process analysis and the neoclassical theory of the firm. American Journal of Agricultural Economics 54: 279–294.CrossRefGoogle Scholar
  15. Hubbard, T. 2003. Information, decisions, and productivity: On-board computers and capacity utilization in trucking. American Economic Review 93: 1328–1353.CrossRefGoogle Scholar
  16. Kostiuk, P. 1990. Compensating differentials for shift-work. Journal of Political Economy 98: 1054–1075.CrossRefGoogle Scholar
  17. Madan, D. 1987. Optimal duration and speed in the long run. Review of Economic Studies 54: 695–700.CrossRefGoogle Scholar
  18. Marris, R. 1964. The economics of capital utilization. Cambridge: Cambridge University Press.Google Scholar
  19. Marshall, A. 1873.The future of the working classes. In Memorials of Alfred Marshall, ed. A.C. Pigou. London: Macmillan, 1925.Google Scholar
  20. Marshall, A. 1923. Industry and trade, 4th ed. Reprints of economic classics, New York: Augustus M. Kelley, 1970.Google Scholar
  21. Marx, K. 1867. Capital, vol. 1, New York: Vintage Books; Random House, 1979.Google Scholar
  22. Mayshar, J., and Y. Halevy. 1997. Shiftwork. Journal of Labor Economics 15: S198–S222.CrossRefGoogle Scholar
  23. Morishima, M. 1973. Marx’s economics. Cambridge: Cambridge University Press.Google Scholar
  24. Morrison, C. 1985. On the economic interpretation and measurement of optimal capacity utilization with anticipatory expectations. Review of Economic Studies 52: 295–310.CrossRefGoogle Scholar
  25. Panzar, J. 1976. A neoclassical approach to peak load pricing. The Bell Journal of Economics 7: 521–530.CrossRefGoogle Scholar
  26. Prucha, I., and M. Nadiri. 1996. Endogenous capital utilization and productivity measurement in dynamic factor demand models. Journal of Econometrics 71: 343–379.CrossRefGoogle Scholar
  27. Shapiro, M. 1993. Cyclical productivity and the workweek of capital. American Economic Review 83: 229–233.Google Scholar
  28. Shapiro, M. 1995. Capital utilization and the marginal premium for work at night. Mimeo: University of Michigan.Google Scholar
  29. Smith, K. 1970. Risk and the optimal utilization of capital. Review of Economic Studies 37: 253–259.CrossRefGoogle Scholar
  30. Winston, G. 1982. The timing of economic activity. Cambridge: Cambridge University Press.Google Scholar

Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Roger Betancourt
    • 1
  1. 1.