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A Near-Term Look at the Capital Shortage
Published online by Cambridge University Press: 19 October 2009
Extract
There is still a great deal of doubt whether we can avoid a capital shortage as economic recovery proceeds. In the near term, one sign of an impending capital shortage will be the appearance of bottlenecks in the industrial sector of our economy. Presently the data on capacity and its utilization are seriously defective.
The Federal Reserve Board, in order to remedy the deficiency of the data, is improving its series on utilization rates. The new series in general will show that we have substantially less unused capacity than indicated by the old series.
My preliminary reading of the improved data, ne ertheless, is that we need not be greatly worried about major bottlenecks well into 1977.
Thereafter, the pace of recovery will be a critical factor. If the economy expands very rapidly, we may not have time to put in place enough capacity to avoid shortages. A moderately paced recovery will give us more time to produce the plant and equipment.
- Type
- II. Special Papers
- Information
- Journal of Financial and Quantitative Analysis , Volume 11 , Issue 4 , November 1976 , pp. 541 - 547
- Copyright
- Copyright © School of Business Administration, University of Washington 1976