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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: Lazarus_Long who wrote (3254)12/12/2003 4:37:47 AM
From: zonder  Read Replies (1) of 110194
 
The data is not fond of your theory

And if your daddy smacked you on the bum more often as a kid when you got arrogant like this, maybe I would love you more :-)

Seriously... I have no "theory". What I told you, that "above 80% capactiy utilization is supposed to be inflationary" is taught in schools. And I said I would be interested to see what the data showed. Thanks for digging it up.

Of course, this refers to the producers' abilities to increase prices when they are reaching a certain point in demand, given all other factors (like capacity, obviously) are constant.

There are a couple of papers on the subject you might like to read. Here is one:

rich.frb.org

Check out the regression analyses and the graphs plotting Capacity Utilization Rate and CPI (Page 7).
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