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Estimating Economic Capacity

Estimating Economic Capacity

Richard E. Gift
Copyright Date: 1968
Pages: 72
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  • Book Info
    Estimating Economic Capacity
    Book Description:

    Noting the variety of methods by which the concept of economic capacity is measured and the different ways that the concept is defined, Richard E. Gift seeks here to develop a conceptual framework within which a meaningful interpretation of these many definitions and measures of productive capacity can be made.

    Gift's method is to show the common structure that is shared by all capacity concepts and arguments. This structure consists of a list of variables that must always be considered when assessing the economic capacity of productive equipment. He then shows that the problems which arise in comparing capacities for different dates can be expressed in the form of a few simple generalizations. His third step is to illustrate specific problems. Finally, he sets out to develop a test for the logical completeness of any argument about capacity.

    eISBN: 978-0-8131-6322-2
    Subjects: Economics, Business

Table of Contents

  1. Front Matter
    (pp. i-vi)
    (pp. vii-x)
  3. Table of Contents
    (pp. xi-xiv)
    (pp. 1-15)

    It iswidely believed by economists and others that many economic and political events are deeply affected by the relationship between actual and possible production. An outgrowth of this belief has been the development of a number of published statistical series on economic capacity. In attempting to prepare and interpret capacity estimates, it is helpful to have a model that defines and shows what determines capacity and which does so for any level of aggregation of establishments or of products. Within such a framework the true differences between alternative concepts can be found, and possible reasons for differences between independently...

    (pp. 16-21)

    In orderto carry out a useful aggregation of an economy’s capacity to produce an individual product, three conditions must be fulfilled. First, the implied demands for labor and materials must be consistent at the capacity level of production. Second, the output at the aggregated capacity level of production must be adequate in quality to meet buyer’s requirements. Finally, it must be reasonable to suppose that market conditions are likely to develop under which there will exist a level of demand adequate to clear such an output from the market. This last condition becomes a crucial consideration if great duplication...

    (pp. 22-39)

    Supposethat early in 1964 a certain Commerce Department official receives information that the Kennedy Round negotiations in Geneva are to bring about a great reduction of tariffs on several imports into the Common Market from the rest of the world. He notes that one of the categories to be affected is rolled photographic film for still prints. He wishes to estimate the ability of some particular American corporation to respond quickly to this future expansion of its market.

    Now, suppose that he obtains the annual reports and other publications of this firm and finds to his good fortune that...

    (pp. 40-54)

    It isimportant to have reasonable assurance that an argument about economic capacity is logically complete; that is, that it takes into account all the variables that are in the conceptual model which is implied by the definition of capacity. The following discussion is devoted to an examination of this question.

    A capacity output for a manufacturing firm is determined by placing successive restrictions upon the set of all positive, rational, integral, and finite numbers, where any number in the set is taken to be an unambiguously defined physical or value outflow of a productive activity. The process of successive...

  8. INDEX
    (pp. 55-56)