The Changing Cyclical Variability of Economic Activity in the United States

J. Bradford De Long and Lawrence H. Summers
Authors registered in the RePEc Author Service: James Bradford DeLong ()

No 1450, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper examines the changing cyclical variability of economic activity in the United States. It first shows that the decline in variability since World War II cannot be explained by changes in the composition of economic activity or by the avoidance of financial panics. We then show that increased automatic stabilization by the government, and the increased availability of private credit after World War II combined to stabilize consumption and reduce the variability of aggregate demand. The main argument of the paper holds that greater price rigidity in recent times may have contributed to economic stability by preventing destabilizing deflations and inflations. Empirical evidence is presented to support this proposition.

Date: 1986-11
Note: EFG ME
View list of references View citations in EconPapers

Published relationship to a non-chapter. This should not happen. Please contact NBER.

Downloads: (external link)
http://www.nber.org/papers/w1450.pdf (application/pdf)
Access to the full text is generally limited to series subscribers, however if the top level domain of the client browser is in a developing country or transition economy free access is provided. More information about subscriptions and free access is available at http://www.nber.org/wwphelp.html.

Related works:
Chapter: The Changing Cyclical Variability of Economic Activity in the United States (1986)
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:nbr:nberwo:1450

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w1450
The price is Paper copy available by mail.

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc
Address: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Contact information at EDIRC.
Series data maintained by ().