The endogeneity-to-demand of the national emergency utilization rate

The paper provides an empirical discussion of the national emergency utilization rate (NEUR), which is based on a "national emergency" definition of potential output and is published by the US Census Bureau. Over the peak-to-peak period 1989-2019, the NEUR decreased by 14.2 percent. The paper examines the trajectory of potential determinants of capacity utilization over the same period as specified in the related theory, namely: capital intensity, relative prices of labor and capital, shift differentials, rhythmic variations in demand, industry concentration, and aggregate demand. It shows that most of them have moved in a direction that would lead to an increase in utilization. The main factor that can explain the decrease in the NEUR is aggregate demand, while the increase in industry concentration might have also played a small role.