Abstract
This paper attempts to help clarify the many-faceted notion of capital utilization in the theory of effective demand. The problem is dealt with in terms of a simple two-sector model. Two aspects of capital utilization are distinguished: (1) the microeconomic aspect of the choice among alternative systems of operation of plant and equipment; and (2) the macroeconomic aspect of which proportion of the existing capital stock will actually be used. Some support is provided for the view that the short run is sometimes a cooperative game in which both labor and capital gain. Copyright 1990 by Oxford University Press.
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