The Normal Degree of Capacity Utilization: The History of a Controversial Concept

CSWP 49 (April 2021)

Author Attilio Trezzini and Daria Pignalosa

Keywords capacity utilization; choice of technique; demand-led growth; competition.

JEL B51; D21.

The determination of the normal degree of capacity utilization has been addressed in the analysis of radically different problems and with different theoretical approaches. By going back over the history of these analyses, the paper highlights the main findings that have emerged from the early literature on the subject and identifies some generally shared principles on the one hand and different methodological positions on the other. Finally, attention is drawn to some issues that seem susceptible to further investigation.

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