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Alternative Measures of Rate of Capacity Utilization for the Turkish Economy: A Comparative Analysis in Means of Adequacy for Empirical Investigation and Growth Models

Year 2011, Volume: 16 Issue: 16, - , 01.12.2011

Benan Eres

Abstract

This study aims at calculating the rate of capacity utilization for the Turkish economy with the cointegration method which is based on the relation between capital stock and the output and compare it with several other measures. The cointegration method is developed in accordance with the long run perspective of the classical/Marxian conceptualization. It also takes into account the Keynesian short-run cycles. For comparative purposes the Wharton index and the output-capital ratio measures are also calculated. These three measures as well as the available series based on the survey data are compared and contrasted to each other. The cointegration measure proves to be the most adequate measure in means of the classical/Marxian long-run as well as the Keynesian short-run theoretical considerations. Together with its technical simplicity in compilation and calculation as compared to the widely used survey based series its theoretical advantages makes it the best measure for use in empirical investigations and macroeconomic modeling.

Keywords

-

References

  • Baxter, M. and R. King (1995), “Measuring Business Cycles: Approximate Band Pass Filters for Economic Time Series, National Bureau of Economic Research (NBER) Working Paper, 5022: 1-53.
  • Brendt, E.R. and C.J. Morrison (1981), “Capacity Utilization Measures: Underlying Economic Theory and an Alternative Approach”, The American Economic Review, 71(2): 48-52.
  • CBRT (2010), “Information Note Regarding the Capacity Utilization Rate of Manufacturing Industry”, CBRT Online Document, <http://www.tcmb.gov.tr/imalat/CUR-Information.pdf>, 05.07.2011.
  • Chagny, O. and J. Döpke (2001), “Measures of the Output Gap in the Euro-Zone: An Empirical assessment of Selected Methods”, Kiel Working Paper, 1053, Institut für Weltwirtschaft, Kiel.
  • Cihan, C., Ş. Saygılı, H. Yurtoğlu (2005), Türkiye Ekonomisi’nde Sermaye Birikimi, Verimlilik ve Büyüme (1972-2003), TÜSİAD Büyüme stratejileri dizisi, DPT-TÜSİAD. No. TÜSİAD-T/2005-12/413.
  • Deigrades, T. and L. Tsoulfidis (2007), “A New Method for the Estimation of Capacity Utilization: Theory and Empirical Evidence from 14 EU Countries”, Bulletin of Economic Research, 59(4): 361-81.
  • Foley, D. and T. Michl (1999), Growth and Distribution, Cambridge, MA: Harvard University Press.
  • Gökçekuş, Ö. (1998), “Trade Liberalization and Capacity Utilization: New Evidence from the Turkish Rubber Industry”, Empirical Economics, 23(4): 561-71.
  • Klein, L.R. (1960), “Theoretical Issues in Measurement of Capacity”, Econometrica, 28(2): 272-86.
  • Klein, L.R. and R. Summers (1966), “The Wharton Index of Capacity Utilisation”, Studies in Quantitative Economics No. 1. University of Pennsylvania.
  • Klein, L.R., V. Long, A. Greenspan, D. Greenwald, N. Edmonson, and G. Perry (1973), “Capacity Utilization: Concept, Measurement and Recent Estimates, Brookings Papers on Economic Activity, 1973(3): 743-63.
  • Lavoi, M., G. Rodriguez and M. Seccareccia (2004), “Similitudes and Discrepancies in Post-Keynesian and Marxist Theories of Investment: A Theoretical and Empirical Investigation”, International Review of Applied Economics, 18(2): 127-49.
  • Lin, L. I-K. (1989), “A Concordance Correlation Coefficient to Evaluate Reproducibility”, Biometrics, 45(1): 255-68.
  • Marx, K. ([1894]1991), Capital,A Critique of Political Economy, Volume 3, London: Penguin Books.
  • Maddison, A. (1991), Dynamic Forces in Capitalist Development: A Long-Run Comparative View, New York: Oxford University Press.
  • Morrison, C.J. (1988), “Quasi-fixed Inputs in U.S. and Japanese Manufacturing: a Generalized Leontief Restricted Cost Function Approach”, The Review of Economics and Statistics, 70(2): 275-87.
  • Ravn, M.O., and H. Uhlig (2002), “On Adjusting the Hodrick-Prescott Filter for the Frequency of Observations”, The Review of Economics and Statistics, 84(2): 371-80.
  • Shaikh, A. and J.K. Moudud (2004), “Measuring Capacity Utilization in OECD Countries: a Cointegration Method”, The Levy Economics Institute of Bard College Working Paper, No.415.
  • Shaikh, A. (2007), “A Proposed Synthesis of Classical and Keynesian Growth”, The New School for Social Research Mimeo, <http://homepage.newschool.edu/~AShaikh/>, 05.07. 2011.
  • Shaikh, A. (2009), “Economic Policy in a Growth Context: A Classical Synthesis of Keynes and Harrod”, Metroeconomica, 60(3): 455-94.
  • SIS (2001), İstatistiksel Göstergeler / Statistical Indicators 1923-1998, Ankara: State Institute of Statistics, Printing Division.
  • SPO, Economik ve Sosyal Göstergeler 1950-2010 / Economic and Social Indicators 1950-2010, <http://www.dpt.gov.tr/PortalDesign/PortalControls/WebIcerikGosterim.aspx?Enc=83D5A6FF03C7B4FCA4781AFB16189036083F239D24768693A2F910AC764FA886>, 05.07.2011.
  • Sraffa, P. (1926), “The Laws of Returns under Competitive Conditions”, Economic Journal, Vol. XXXVI, No: 144: 535-50.
  • Taylor, J., D. Winter, and D. Pearce (1970), “A 19 Industry Quarterly Series of Capacity Utilization in the United Kingdom, 1948-1968”, Oxford Bulletin of Economics and Statistics, 32(2): 113-31.
  • Taylor, L. (2004), Reconstructing Macroeconomics: Structuralist Proposals and Critiques of the Mainstream, Cambridge, MA: Harvard University Press.
  • Tsaliki P. and L. Tsoulfidis (1999), “Capacity Utilization in Greek Manufacturing”, Modern Greek Studies Yearbook 9: 127-42.
  • TSI, National Accounts: Gross National Product by Production Approach, TurkSTAT online database, <http://www.turkstat.gov.tr/VeriBilgi.do?tb_id=55&ust_id=16>, 05.07. 2011.
  • TSI (2008), “Gayrı Safi Yurtiçi Hasıla Güncelleme Çalışmaları: 1987 ve 1998 Bazlı GSYİH Serileri Arasındaki Farklar” TSI online document, <http://www.tuik.gov.tr/VeriBilgi.do?tb_id=55&ust_id=16 >, 05.07.2011.
  • TSI (2010), “İmalat Sanayi Kapasite Kullanım Oranlarının Hesaplanması ve Yayınlanması Hakkınadaki Kamuoyu Duyurusu”, TSI Online Document, <http://www.tuik.gov.tr/jsp/duyuru/upload/kamuoyuduyuru11012010.pdf>, 05.07.2011.
  • Ünlü, A. (2010), “Türkiye için Sermaye Stok Verileri Güncellenmesi ve Büyüme Oranıyla İlişkisi: 1972-2008 Dönemi”, Akademik Araştırmalar ve Çalışmalar Dergisi / Journal of Academic Researches and Studies, 2(3): 98-116.
  • Varian, H. (1992), Microeconomic Analysis, 3rd edition, W.W.Norton & Company.
  • Weisskopf, T.E. (1979), “Marxian crisis theory and the rate of profit in the postwar U.S. economy”, Cambridge Journal of Economics, 3(4): 341-78.

Alternative Measures of Rate of Capacity Utilization for the Turkish Economy: A Comparative Analysis in Means of Adequacy for Empirical Investigation and Growth Models

Year 2011, Volume: 16 Issue: 16, - , 01.12.2011

Benan Eres

Abstract

This study aims at calculating the rate of capacity utilization for the Turkish economy with the cointegration method which is based on the relation between capital stock and the output and compare it with several other measures. The cointegration method is developed in accordance with the long run perspective of the classical/Marxian conceptualization. It also takes into account the Keynesian short-run cycles. For comparative purposes the Wharton index and the output-capital ratio measures are also calculated. These three measures as well as the available series based on the survey data are compared and contrasted to each other. The cointegration measure proves to be the most adequate measure in means of the classical/Marxian long-run as well as the Keynesian short-run theoretical considerations. Together with its technical simplicity in compilation and calculation as compared to the widely used survey based series its theoretical advantages makes it the best measure for use in empirical investigations and macroeconomic modeling.

Keywords

-

References

  • Baxter, M. and R. King (1995), “Measuring Business Cycles: Approximate Band Pass Filters for Economic Time Series, National Bureau of Economic Research (NBER) Working Paper, 5022: 1-53.
  • Brendt, E.R. and C.J. Morrison (1981), “Capacity Utilization Measures: Underlying Economic Theory and an Alternative Approach”, The American Economic Review, 71(2): 48-52.
  • CBRT (2010), “Information Note Regarding the Capacity Utilization Rate of Manufacturing Industry”, CBRT Online Document, <http://www.tcmb.gov.tr/imalat/CUR-Information.pdf>, 05.07.2011.
  • Chagny, O. and J. Döpke (2001), “Measures of the Output Gap in the Euro-Zone: An Empirical assessment of Selected Methods”, Kiel Working Paper, 1053, Institut für Weltwirtschaft, Kiel.
  • Cihan, C., Ş. Saygılı, H. Yurtoğlu (2005), Türkiye Ekonomisi’nde Sermaye Birikimi, Verimlilik ve Büyüme (1972-2003), TÜSİAD Büyüme stratejileri dizisi, DPT-TÜSİAD. No. TÜSİAD-T/2005-12/413.
  • Deigrades, T. and L. Tsoulfidis (2007), “A New Method for the Estimation of Capacity Utilization: Theory and Empirical Evidence from 14 EU Countries”, Bulletin of Economic Research, 59(4): 361-81.
  • Foley, D. and T. Michl (1999), Growth and Distribution, Cambridge, MA: Harvard University Press.
  • Gökçekuş, Ö. (1998), “Trade Liberalization and Capacity Utilization: New Evidence from the Turkish Rubber Industry”, Empirical Economics, 23(4): 561-71.
  • Klein, L.R. (1960), “Theoretical Issues in Measurement of Capacity”, Econometrica, 28(2): 272-86.
  • Klein, L.R. and R. Summers (1966), “The Wharton Index of Capacity Utilisation”, Studies in Quantitative Economics No. 1. University of Pennsylvania.
  • Klein, L.R., V. Long, A. Greenspan, D. Greenwald, N. Edmonson, and G. Perry (1973), “Capacity Utilization: Concept, Measurement and Recent Estimates, Brookings Papers on Economic Activity, 1973(3): 743-63.
  • Lavoi, M., G. Rodriguez and M. Seccareccia (2004), “Similitudes and Discrepancies in Post-Keynesian and Marxist Theories of Investment: A Theoretical and Empirical Investigation”, International Review of Applied Economics, 18(2): 127-49.
  • Lin, L. I-K. (1989), “A Concordance Correlation Coefficient to Evaluate Reproducibility”, Biometrics, 45(1): 255-68.
  • Marx, K. ([1894]1991), Capital,A Critique of Political Economy, Volume 3, London: Penguin Books.
  • Maddison, A. (1991), Dynamic Forces in Capitalist Development: A Long-Run Comparative View, New York: Oxford University Press.
  • Morrison, C.J. (1988), “Quasi-fixed Inputs in U.S. and Japanese Manufacturing: a Generalized Leontief Restricted Cost Function Approach”, The Review of Economics and Statistics, 70(2): 275-87.
  • Ravn, M.O., and H. Uhlig (2002), “On Adjusting the Hodrick-Prescott Filter for the Frequency of Observations”, The Review of Economics and Statistics, 84(2): 371-80.
  • Shaikh, A. and J.K. Moudud (2004), “Measuring Capacity Utilization in OECD Countries: a Cointegration Method”, The Levy Economics Institute of Bard College Working Paper, No.415.
  • Shaikh, A. (2007), “A Proposed Synthesis of Classical and Keynesian Growth”, The New School for Social Research Mimeo, <http://homepage.newschool.edu/~AShaikh/>, 05.07. 2011.
  • Shaikh, A. (2009), “Economic Policy in a Growth Context: A Classical Synthesis of Keynes and Harrod”, Metroeconomica, 60(3): 455-94.
  • SIS (2001), İstatistiksel Göstergeler / Statistical Indicators 1923-1998, Ankara: State Institute of Statistics, Printing Division.
  • SPO, Economik ve Sosyal Göstergeler 1950-2010 / Economic and Social Indicators 1950-2010, <http://www.dpt.gov.tr/PortalDesign/PortalControls/WebIcerikGosterim.aspx?Enc=83D5A6FF03C7B4FCA4781AFB16189036083F239D24768693A2F910AC764FA886>, 05.07.2011.
  • Sraffa, P. (1926), “The Laws of Returns under Competitive Conditions”, Economic Journal, Vol. XXXVI, No: 144: 535-50.
  • Taylor, J., D. Winter, and D. Pearce (1970), “A 19 Industry Quarterly Series of Capacity Utilization in the United Kingdom, 1948-1968”, Oxford Bulletin of Economics and Statistics, 32(2): 113-31.
  • Taylor, L. (2004), Reconstructing Macroeconomics: Structuralist Proposals and Critiques of the Mainstream, Cambridge, MA: Harvard University Press.
  • Tsaliki P. and L. Tsoulfidis (1999), “Capacity Utilization in Greek Manufacturing”, Modern Greek Studies Yearbook 9: 127-42.
  • TSI, National Accounts: Gross National Product by Production Approach, TurkSTAT online database, <http://www.turkstat.gov.tr/VeriBilgi.do?tb_id=55&ust_id=16>, 05.07. 2011.
  • TSI (2008), “Gayrı Safi Yurtiçi Hasıla Güncelleme Çalışmaları: 1987 ve 1998 Bazlı GSYİH Serileri Arasındaki Farklar” TSI online document, <http://www.tuik.gov.tr/VeriBilgi.do?tb_id=55&ust_id=16 >, 05.07.2011.
  • TSI (2010), “İmalat Sanayi Kapasite Kullanım Oranlarının Hesaplanması ve Yayınlanması Hakkınadaki Kamuoyu Duyurusu”, TSI Online Document, <http://www.tuik.gov.tr/jsp/duyuru/upload/kamuoyuduyuru11012010.pdf>, 05.07.2011.
  • Ünlü, A. (2010), “Türkiye için Sermaye Stok Verileri Güncellenmesi ve Büyüme Oranıyla İlişkisi: 1972-2008 Dönemi”, Akademik Araştırmalar ve Çalışmalar Dergisi / Journal of Academic Researches and Studies, 2(3): 98-116.
  • Varian, H. (1992), Microeconomic Analysis, 3rd edition, W.W.Norton & Company.
  • Weisskopf, T.E. (1979), “Marxian crisis theory and the rate of profit in the postwar U.S. economy”, Cambridge Journal of Economics, 3(4): 341-78.
There are 32 citations in total.

Details

Primary Language English
Journal Section Articles
Authors

Benan Eres

Publication Date December 1, 2011
Submission Date December 12, 2014
Published in Issue Year 2011 Volume: 16 Issue: 16

Cite

APA Eres, B. (2011). Alternative Measures of Rate of Capacity Utilization for the Turkish Economy: A Comparative Analysis in Means of Adequacy for Empirical Investigation and Growth Models. Sosyoekonomi, 16(16). https://doi.org/10.17233/se.42956
AMA Eres B. Alternative Measures of Rate of Capacity Utilization for the Turkish Economy: A Comparative Analysis in Means of Adequacy for Empirical Investigation and Growth Models. Sosyoekonomi. October 2011;16(16). doi:10.17233/se.42956
Chicago Eres, Benan. “Alternative Measures of Rate of Capacity Utilization for the Turkish Economy: A Comparative Analysis in Means of Adequacy for Empirical Investigation and Growth Models”. Sosyoekonomi 16, no. 16 (October 2011). https://doi.org/10.17233/se.42956.
EndNote Eres B (October 1, 2011) Alternative Measures of Rate of Capacity Utilization for the Turkish Economy: A Comparative Analysis in Means of Adequacy for Empirical Investigation and Growth Models. Sosyoekonomi 16 16
IEEE B. Eres, “Alternative Measures of Rate of Capacity Utilization for the Turkish Economy: A Comparative Analysis in Means of Adequacy for Empirical Investigation and Growth Models”, Sosyoekonomi, vol. 16, no. 16, 2011, doi: 10.17233/se.42956.
ISNAD Eres, Benan. “Alternative Measures of Rate of Capacity Utilization for the Turkish Economy: A Comparative Analysis in Means of Adequacy for Empirical Investigation and Growth Models”. Sosyoekonomi 16/16 (October 2011). https://doi.org/10.17233/se.42956.
JAMA Eres B. Alternative Measures of Rate of Capacity Utilization for the Turkish Economy: A Comparative Analysis in Means of Adequacy for Empirical Investigation and Growth Models. Sosyoekonomi. 2011;16. doi:10.17233/se.42956.
MLA Eres, Benan. “Alternative Measures of Rate of Capacity Utilization for the Turkish Economy: A Comparative Analysis in Means of Adequacy for Empirical Investigation and Growth Models”. Sosyoekonomi, vol. 16, no. 16, 2011, doi:10.17233/se.42956.
Vancouver Eres B. Alternative Measures of Rate of Capacity Utilization for the Turkish Economy: A Comparative Analysis in Means of Adequacy for Empirical Investigation and Growth Models. Sosyoekonomi. 2011;16(16).
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