ECONOMIC CAPACITY UTILIZATION AND PRODUCTIVITY GROWTH IN GREEK AGRICULTURE

The rate of economic capacity utilisation of the capital stock and the rate of TFP growth are assessed for the agricultural sector in Greece . The empirical results suggest that capital in this sector has been o ver-utilised throughout 1971-93. The mean value of the rate of economi c capacity utilisation has been 1.477, that is, 48 per cent above the full equilibrium rate. The average of TFP growth per annum under the a ssumption of short-run capital fixity has been 1.29 per cent, while un der the assumption of full equilibrium it has been 1.41 per cent. Thes e results indicate that assuming, incorrectly, full equilibrium biases the annual rate of productivity growth upwards.