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Motivated by discussions whether financial firms use too much equity capital and labor, we analyze the input utilization in the German property and casualty (p/c) insurance industry in a newly constructed sample of firm-level data in the period 1956–2019. An earlier study for the U.S. (Cummins and Nini, J Financial Serv Res 21(1–2):15–53, 2002) finds that p/c insurers over-utilize capital. Compared to this study, our large historical dataset exhibits less heterogeneity and thus allows a cleaner identification of the impact of firm characteristics on input factor utilization. We show that German p/c insurers have substantial cost savings potential and that labor input is the main driver of inefficiency. We also document severe differences in firm characteristics driving the utilization of labor. Our results contribute to both the academic discussion on productivity and efficiency in financial services as well as to the political discussion on the future of work and capital regulation in this sector.

The tax compliance problem is an imminent issue in a self-assessment taxation system in Indonesia. Tax audit is an important tool used by the tax authority to address the problem. Several studies showed that tax inspection might change the behavior of the taxpayers. Therefore, it is interesting to see how tax inspection will affect taxpayers' behavior related to their subjective measure of firms' performance. This research uses the difference-in-difference approach combine with the entropy balancing method to estimate the causal impact of tax inspection on firms’ performance. The findings showed that the inspected firms showed an increase in their perception of capital utilization which can be explained using tax evasion model or managerial benefits concept.

Our paper documents that capital utilization and short-term debt are procyclical. We show that a strong positive relationship exists both at the aggregate and firm levels, and it persists even when...

Using the workweek of capital as a measure of capital utilization, we empirically test whether news shocks actually increase capital utilization. To this end, by estimating a panel VAR on two-digit manufacturing data identifying news shocks as innovations to stock returns orthogonal to the variations in current-period TFP growth, we find the positive response of capital utilization to news shocks. Moreover, to explain the positive response of capital utilization to news shocks in terms of plant-level investment behavior, we propose a heterogeneous plant model that combines the fixed cost of capital adjustment and an endogenous capital utilization choice. With the presence of fixed costs, except for the plants that have recently adjusted capital stock, news shock shortens the effective time horizon of currently installed capital stock and increases capital utilization. When the model economy is calibrated to match the salient features of the plant-level investment rate distribution, the economy generates a news-driven positive response of capital utilization.

There are two main lines of theories about income distribution, following the seminal papers of Kalecki and Kaldor. These two theories have different aspect in terms of their assumptions about competitive characteristics of market, capital utilization, market imperfections and the role of government. Several studies are designed to develop these two theories and some studies use assumptions of both theories in order to explain the income distribution. This article includes a summary of Kaleckian and Kaldorian models; their assumptions and recent contributions to these models.

Electric power material demand forecasting is an important part of power grid planning management, which helps to save power industrial costs and improve capital utilization of power companies. Due to the irregularity of historical data for electric power materials, the characteristic of electric power material demand is complicated and power grid companies lack accurate forecasting methods. By identifying the continuous and intermittent characteristics of electric power material demand, this paper separately designs the Long Short-Term Memory (LSTM) method, and the Grey prediction Model based BP neural network (GM-BP) method to individually forecast the electric power material demand with different demand characteristics. Finally, the proposed methods are tested by the practical data of an electric power enterprise, and simulation results validate that the proposed methods can effectively adapt to different features of electric power material demand as well as predict electric power material demand with good accuracy.

We identify US defense news shocks as shocks that best explain future moviments in defense spending over a five-year horizon and are orthogonal to current defense spending. Our identified shocks are strongly correlated with the Ramey (2011) news shocks, but explain a larger share of macroeconomic fluctuations and have significant demand effects. Fiscal news induces significant and persistent increases in output, consumption, investment, hours and the interest rate. Standard DSGE models fail to produce such a pattern. We propose a sticky price model with variable capital utilization, capital adjustment costs, and rule-of-thumb consumers that replicates the empirical findings and allows us to test the validity of our methodology for extracting anticipated fiscal shocks from the data.

The possibility that automation capital is idle has been so far neglected in the literature. However, we show that the departure from the full utilization assumption has significant transitional as well as long-run consequences for growth. We show that capital utilization can bring down the convergence speed as well as the long run growth rate towards an empirically plausible number provided that the elasticities of depreciation with respect to physical and automation capital utilization are sufficiently heterogenous. If not, or if heterogenous utilization elasticities tend to infinity, the model fails to produce results that are line with empirical data. The point is that it is not the introduction of capital utilization per se but the relationship between the elasticities of utilization of automation and physical capital that is relevant to produce empirically plausi­ble speeds of convergence and growth rates.

Schmitt-Grohe and Uribe (1997) demonstrate that a balanced-budget fiscal policy can induce aggregate instability unrelated to economic fundamentals. The empirical relevance of this result has been challenged by subsequent studies. In this paper we show, both analytically and numerically, that such extrinsic instability is an empirically robust plausibility associated with a balanced-budget rule once endogenous capital utilization is taken into consideration. This suggests that the design or operation of a balanced-budget fiscal policy must recognize that it may constitute a practical source of self-fulfilling prophecies and belief-driven fluctuations.

We introduce a pro-cyclical endogenous utilization rate of physical capital stock into a real business cycle model augmented with a government sector in detail. We calibrate the model to Bulgarian data for the period following the introduction of the currency board arrangement (1999–2016). We investigate the quantitative importance of the endogenous depreciation rate and the capital utilization mechanism working through the use of energy for cyclical fluctuations in Bulgaria. In particular, a positive shock to energy prices in the model works like a negative technological shock. Allowing for variations in factor utilization and the presence of energy as a factor of production improves the model performance against data, and in addition this extended setup dominates the standard RBC model framework with constant depreciation and a fixed utilization rate of physical capital (e.g., Vasilev (2009)).

This paper investigates a propagation mechanism of the energy price shock in a model where capital utilization is associated with costly energy consumption. Endogenous depreciation is an important element of the model, as it has been shown to produce a significant negative effect of energy prices on output. I show that the amplifying effect of endogenous depreciation is determined by the choice of the functional form and calibration strategy for the energy cost function. My estimates of the energy cost function allow to conclude that the energy price shock has only a moderate effect on output in this model, while endogenous depreciation mitigates rather than amplifies the effect of the energy price shock.

A two-level CES aggregate production function is used to empirically analyze the fluctuations in markups, technology, and utilization in the Great Recession. Quarterly US gross output data suggest a strong markup increase, limited technology movements, and a low labor–capital substitution elasticity.

In a standard endogenous R&D growth model with expanding variety of intermediate inputs I incorporate endogenous depreciation rate for the intermediate inputs. The depreciation rate depends negatively on the utilization rate of the intermediate inputs and positively on their durability level, resulting into smaller economic growth relatively to the standard models of expanding variety inputs. The reason is that higher durability for intermediate inputs implies a lower demand for the intermediate inputs which in turn reduces the motivation for innovation. The utilization rate on the other hand, even if it increases the depreciation rate, is responsible for higher demand for the intermediate inputs and therefore it increases the motivation for innovation. The two forces (durability and utilization) have an asymmetric effect on economic growth.

Even though non-interest expenses on physical capital and labor comprise at least 40 percent of banks’ total costs, much of the banking literature entirely ignores real resource costs. This paper shows that whenever banks realize economies of scope in the use of resources, banks’ balance-sheet choices are inextricably linked to their decisions regarding employment of capital and labor and demonstrates that the intensity of capital utilization must be systematically related to the loan-deposit ratio. Based on U.S. banking data, we provide empirical evidence supporting this prediction.

[Abstract] This paper incorporates capital utilization in an endogenous growth model with public capital, and examines the effects of fiscal policy on both economic performance and welfare. Dynamic analysis reveals that maximizing equilibrium capacity coincides with maximizing the economic growth rate in the long-run, though not in the short-run. It also demonstrates that the growth-maximizing tax rate is either increasing or decreasing with respect to the marginal cost of private capital utilization and capacity utilization of public capital depending on the elasticity of substitution. Welfare analysis shows that the growth-maximizing government not only over-invests but also under-invests in public capital stock. Similarly, it shows not only an excess use of public capital but also insufficient use of public capital., 著者漢字表記：玉井, 寿樹

We show that sluggish firm entry causes productivity to vary endogenously in response to technology shocks. The endogenous productivity effect is caused by incumbent firms utilizing excess capacity as entry adjusts. We develop a nonparametric model of endogenous sunk costs and monopolistic competition to show that imperfect competition and dynamic entry are necessary and jointly sufficient conditions for endogenous productivity fluctuations. Quantitatively we show the endogenous productivity effect is as large as that from a traditional ‘capital utilization’ effect.

We introduce in a post-Keynesian/Kaleckian model of growth and distribution a constraint on firms’ investment induced by increasing adjustment costs and/or limited financial resources. Whereas in the short run limiting firms’ investment reduces capacity utilization and capital accumulation, in the long run, allowing the adjustment of the “normal” to the actual degree of capacity utilization, the direction of the impact of the constraint goes in the opposite direction: relaxing the constraint reduces capital utilization and accumulation. Moreover, an increase in the saving propensity or a fall in wages do not always cause a reduction in the degree of capital utilization – the so-called paradoxes of thrift and costs – as predicted by the standard post-Keynesian/Kaleckian analysis; and growth could be profit led. These results are not confined to long-run positions of the economy characterized by convergence to a stationary equilibrium but take also into account periodic or chaotic fluctuations.

We examine the role of inventories and capacity utilization (of both capital and labor) for the propagation of business cycle fluctuations. We document a new set of facts regarding the U.S. cyclical regularities of inventories and capacity utilization. First, we find that capital utilization and the flows of services from both capital and labor are procyclical, and comove with the holdings of inventories. Second, we find that labor utilization is procyclical as well, but is weakly negatively correlated with inventories. We build a model that accounts for these facts, and also accounts for the stylized inventory facts, i.e., inventory holdings are procyclical, while the inventory-to-sales ratio is countercyclical. The analysis is centered on the effects of two possible shocks: preference (demand) shocks and technology shocks. Our model shows that inventories and the rate of capital utilization are mostly complements, while inventories and the rate of labor utilization are mostly substitutes. It further shows that temporary demand shocks emphasize the role of inventories as being a “shock absorber,” whereas high-persistence demand shocks, as well as technology shocks of any persistence, emphasize the role of inventories as being a complement to consumption.

This paper examines the effect of credit rationing on export performance by small and medium-sized firms in China. We use a detailed firm-level data provided by the Small and Medium-sized Enterprises Dynamic Survey (SMEDS) during 2015-2016 to conduct this analysis. The SMEDS provides firm-specific measures of credit rationing based directly on firm-level responses to the survey rather than indirect ones, based on firm-level financial statements. We find that, at the extensive margin, weak and strong credit rationing reduce export probability of small and medium-sized enterprises (SMEs) by 15.1% and 39.6%, respectively. At the intensive margin, they decrease SMEs’ export values by more than 20.0% and over 28.8%, respectively. Different than existing literature, we construct valid firm-level instruments, firm-level housing stock, for credit rationing rather than using province-level instruments. We also employ county-industry-level instruments and obtain consistent estimates. In addition, credit rationing exhibits heterogeneous impacts on firms with different liquidity ratios, product portfolios, external collateral, and capital utilization rates.