This article reviews how the Federal Reserve measures capacity utilization and explains why capacity utilization has been, and likely will remain, a useful indicator of inflationary pressures and business cycle fluctuations. The authors also explain why economic developments, such as the pace of...

The growth of U.S. labor productivity rebounded in the second half of the 1990s, after nearly a quarter century of sluggish gains. We assess the contribution of information technology to this rebound, using the same neoclassical framework as in our earlier work. We find that a surge in the use...