Productivity measurement with adjustments for variations in capacity utilization and other forms of temporary equilibrium

Berndt, Ernst R.; Fuss, Melvyn A.

doi:10.1016/0304-4076(86)90025-4

Cited by 224 publications

(140 citation statements)

References 18 publications

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“…As shown by Berndt and Fuss (1986), the marginal product of capital varies directly with capital utilization and is absorbed in capital income and attributed to capital rental prices only when ex post calculated rates of return are used.…”

Section: Ict Services Prices Vs Ict Asset Pricesmentioning

confidence: 99%

ICT Services and their Prices: What do they tell us about Productivity and Technology?

Byrne

Corrado

2017

FEDS

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This paper reassesses the link between ICT prices, technology, and productivity. To understand how the ICT sector could come to the rescue of a whole economy, we extend a multi-sector model due to Oulton (2012) to include ICT services (e.g., cloud services) and use it to calibrate the steady-state contribution of the ICT sector to growth in aggregate U.S. labor productivity. Because ICT technologies diffuse through the economy increasingly via purchases of cloud and data analytic services that are not fully accounted for in the standard narrative on ICT's contribution to economic growth, the contribution of ICT to growth in output per hour going forward is found to be substantially larger than generally thought-1.4 percentage points per year. One reason why the estimated contribution is so large is that official ICT asset prices are found to substantially understate the productivity of the sector. The model developed in this paper also has implications for the relationship between prices for ICT services and prices for the capital stocks (i.e., ICT assets) used to supply them. In particular, ICT service prices may diverge from asset prices and capture productivity gains from ICT asset management by the sector.

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Section: Ict Services Prices Vs Ict Asset Pricesmentioning

confidence: 99%

ICT Services and their Prices: What do they tell us about Productivity and Technology?

Byrne

Corrado

2017

FEDS

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“…2 between the change in the labor input and the utilization of capacity, we can specify the adjustment costs as a function of capacity utilization, that is AC (ln l ) = AC (ln u) 2 . This variable has the double advantage of being more easily observable and exogenously determined.…”

Section: A Model For Cost Sharesmentioning

confidence: 99%

Input cost, capacity utilization and substitution in the short run

Delgado¹,

Jaumandreu²,

Martín-Marcos³

1999

Spanish Economic Review

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Abstract. This article studies the behavior of input cost shares in an environment where labor is costly to adjust, materials can be adjusted at no cost and capital is fixed. A model relating cost shares with relative prices and adjustment costs is proposed, allowing joint estimation of the elasticity of substitution and the adjustment cost function, which is an unknown function of the capacity utilization. Based on a panel of more than 700 manufacturing firms, we find evidence of strong input share variations according to the degree of capacity utilization. The estimated shapes of adjustment costs curves of labor are in agreement with our theoretical model, and we obtain sensible elasticities of substitution estimates. Based on such estimates, we find evidence of a negative (positive) bias in downturns (recoveries) in conventional productivity growth measures. JEL classification: D24, E32

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“…Unfortunately, and somewhat 3 For a review on the problems to determine TFP see Hulten (2001). For the problem of capital utilization for TFP calculation see Hulten (1986), Burnside et al (1996), Berndt et al (1986). 7 surprisingly, detailed data on employees (e.g., education level, work experience, age structure) are not available on the country level, even not for industrialized countries.…”

Section: Estimation Set Upmentioning

confidence: 99%

International Knowledge Spillovers: The Benefits from Employing Immigrants

Ossietzky

Hiller

Bochum³

2015

SSRN Journal

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Productivity measurement with adjustments for variations in capacity utilization and other forms of temporary equilibrium

Cited by 224 publications

References 18 publications

ICT Services and their Prices: What do they tell us about Productivity and Technology?

ICT Services and their Prices: What do they tell us about Productivity and Technology?

Input cost, capacity utilization and substitution in the short run

International Knowledge Spillovers: The Benefits from Employing Immigrants

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