On the Sources of the Great Moderation

Luca Gambetti and Jordi Galí

American Economic Journal: Macroeconomics, 2009, vol. 1, issue 1, 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)

JEL-codes: E23 E24 J22 J24 (search for similar items in EconPapers)
Date: 2009
Note: DOI: 10.1257/mac.1.1.26
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Citations: View citations in EconPapers (280)

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Related works:
Working Paper: On the Sources of the Great Moderation (2008)
Working Paper: On the Sources of the Great Moderation (2008)
Journal Article: On the sources of the Great Moderation (2007)
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