Finance and Economics Discussion Series (FEDS)
February 2001
Production Function Estimation With Industry Capacity Data
Plutarchos Sakellaris
Abstract:
This paper introduces a new data set for the analysis of productivity in U.S. manufacturing. It consists of data on production and input levels when the plants in an industry operate at capacity. The estimates are consistent with those obtained using data on actual operations from the ASM. As an application, I use this data to estimate the rate of growth of technological change that is embodied in equipment capital. The estimates imply a larger role of equipment investment and embodied technological change on economic growth than is conventionally assumed.
Keywords: Productive capacity, capacity utilization, productivity growth, embodied technological change, production function
PDF: Full Paper
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