J. Bradford DeLong
delong@econ.berkeley.edu
http://www.j-bradford-delong.net/

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Webpages useful for teachers of intermediate macroeconomics:

recent articles by economists to illustrate arguments and models used in my macroeconomics textbook
recent news articles on macroeconomic events;
analyses of the current and recent economic situation
today's news headlines from moreover.com.

Capacity Utilization

2002-03-06

Powerpoint Version

When a recession hits, the amount of unused capacity in American industry rises rapidly: capacity utilization typically falls from somewhere around 85% to something between 70% and 80%.
The runup to a recession is often accompanied by slowly-falling capacity utilization--as was the case in 1979, 1989, and early 1990.
The boom of the 1990s did not see capacity utilization reach its standard high boom-time levels, in large part because industrial capacity grew so fast because of the extremely high levels of investment.
But capacity utilization began to decline in recent years well in advance of the NBER's March 2001 dating of the beginning of the recession.
Capacity utilitization has so far declined--measured from its peak--by more than in the recession of 1990-91, more than in the recession of 1980, and by four-fifths as much as in the recession of 1981-82.

Previous Handouts

2001-02-27: U.S. Household Incomes
2001-02-20: Unemployment in the 1990s (Chapter 2: Economic Data)
2001-02-06: U.S. Monetary Policy (Chapter 13: Stabilization Policy)
2001-01-28: GDP in 2000 and 2001 (Chapter 13: Stabilization Policy. Chapter 2: Economic Data)
2001-01-21: The Course of the U.S. Recession (Chapter 13: Stabilization Policy)
2001-01-07: Argentina's Crisis (Chapter 15: Exchange Rate Regimes)
2001-12-10: The U.S. Recession (Chapter 2: Principal Macroeconomic Variables)
2001-12-03: The Overvalued Euro (Chapter 3: Exchange Rates; Chapter 15: Exchange Rate Regimes)
2001-11-26: Net Exports, the Exchange Rate, and an IS-Led Boom (Chapter 11: Balance of Payments; Chapter 15: Exchange Rate Regimes)
2001-11-19: The European Central Bank and Its Monetary Policy (Chapter 13: Stabilization Policy)
2001-11-12: Central Banks Worldwide Cut Interest Rates Again (Chapter 13: Stabilization Policy)
2001-11-05: Effects of the Collapse in Spending on Durables (Chapter 9: Income-Expenditure and the Multiplier.)
2001-10-28: What Kind of Stimulus (Chapter 13: Stabilization Policy. Chapter 9: Income-Expenditure and the Multiplier.)
2001-10-21: Federal Reserve Reaction to the Terror Attack on the World Trade Center (Chapter 13: Stabilization Policy. Chapter 10: The IS Curve.)
2001-10-14: Why a Stimulus Package Might Be Desireable (Chapter 13: Stabilization Policy. Chapter 10: The IS Curve.)

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