Estimating Capacity Utilization Using a SVAR Model: An Application to the US and Canadian Economies Theologos Dergiades Lefteris Tsoulfidis University of Macedonia University of Macedonia Abstract This paper develops a method for the estimation of the rate of capacity utilization based on standard growth theory and the Structural VAR estimating technique. The measures of capacity utilization we derive for the US and Canadian economies are compared with widely-used survey measures. We show that the degree of association and synchronization of the two measures for both economies is pretty high, a result that encourages the use of our method as a reliable alternative. Department of Economics, University of Macedonia.We thank Chris Wilson and an anonymous referee of this journal for many helpful and constructive comments.Names are randomly ordered. Citation: Dergiades, Theologos and Lefteris Tsoulfidis, (2007) "Estimating Capacity Utilization Using a SVAR Model: An Application to the US and Canadian Economies." Economics Bulletin, Vol. 5, No. 4 pp. 1-12 Submitted: March 16, 2006. Accepted: February 21, 2007. URL: http://economicsbulletin.vanderbilt.edu/2007/volume5/EB-06E30004A.pdf