The 1989 Change in the Definition of Capacity: A Plant-Level Perspective
June 2000
Working Paper Number:
CES-00-09
Abstract
The Survey of Plant Capacity (SPC) is the primary source of data used to construct the Federal Reserve's manufacturing utilization rates. A major restructuring of the SPC in 1989 presents a potential obstacle to constructing measures of utilization that are consistent over time. The object of this study is to take advantage of plant-level data that is available at the Census Bureau's O'ce of the Chief Economist to thoroughly reexamine the link between the historical and current measures of capacity. The preponderance of evidence in this study suggests that preferred utilization is consistent with \full" utilization and, therefore, supports the underlying Federal Reserve methodology for estimating capacity utilization.
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