Three essays on effective demand and capacity utilisation

For many years, there was an unanswered question among non-mainstream scholars: What’s the behaviour through time of capacity utilisation after an aggregate demand shock? Following the Classical-Keynesian approach, in this thesis I revise critically the literature on the relationship between output and capacity utilisation and how capacity adjust to the former. After that, I present empirical evidence on the effect of output and capacity utilisation; transitory effects seem to be the rule, rather than the exception. Finally, I try to understand whether it was demand, among many other factors, the main determinant that explains the declining trend in the utilisation of installed capacity in the United States.