On the Sources of the Great Moderation

Jordi Galí and Luca Gambetti

American Economic Journal: Macroeconomics, 2009, vol. 1, issue 1, pages 26-57

Abstract: The Great Moderation in the US economy has been accompanied by large changes in the comovements among output, hours, and labor productivity. Those changes are reflected in both conditional and unconditional second moments as well as in the impulse responses to identified shocks. Among other changes, our findings point to an increase in the volatility of hours relative to output, a shrinking contribution of nontechnology shocks to output volatility, and a change in the cyclical response of labor productivity to those shocks. That evidence suggests a more complex picture than that associated with "good luck" explanations of the Great Moderation. (JEL: E23, E24, J22, J24)

Date: 2009
View citations in EconPapers

Downloads: (external link)
http://hdl.handle.net/10.1257/mac.1.1.26 (text/html)
http://www.aeaweb.org/articles.php?doi=10.1257/mac.1.1.26 (application/pdf)
http://www.aeaweb.org/aej-macro/data/2007-0005_data.zip dataset accompanying article (application/zip)
Access to full text is restricted to AEA members.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:aea:aejmac:v:1:y:2009:i:1:p:26-57

Ordering information: This journal article can be ordered from
http://www.aeaweb.org/subscribe.html

Access Statistics for this article

American Economic Journal: Macroeconomics is edited by Steven J. Davis

More articles in American Economic Journal: Macroeconomics from American Economic Association
Contact information at EDIRC.
Series data maintained by Christopher F. Baum ().