Capacity Utilization and Prices Within Industries
The capacity utilization rate is a commonly used indicator of future price changes. Studies often find that the total industry capacity utilization rate and inflation are correlated. Peter S. Yoo examines capacity utilization rate data and price data for 23 industrial sectors to see if the two variables show significant correlations within individual industries. He finds that the regression results for specific industries provide insight about the robustness of the relationship between the capacity utilization rate and price changes.