Estimating normal capacity utilization rates and their tolerable ranges of values: A comment on Setterfield

International audienceTaking the potential instability of the Kaleckian model of growth as his starting point, Setterfield (2017) investigated, inter alia, the possibility of taming the Harrodian instability. His investigation used a range of tolerable values, rather than a unique value, for the normal rate of capacity utilization. After illustrating his point theoretically, Setterfield then proposes empirical methods to estimate the normal capacity utilization rate and the corresponding tolerance range. This paper suggests improved methods to estimate the normal rate of capacity utilization and its tolerance range. The proposed alternative solutions offer better consistency with Post-Keynesian behavioral theories, and the presented exploratory narrative based on these suggestions can partly explain the current stagnation