Why has output become less volatile?

Bharat Trehan ()

FRBSF Economic Letter, 2005, issue sep16

Abstract: Over the past twenty years, output growth in the U.S. has become noticeably less volatile. During that time, the economy has experienced two recessions, compared with four in each of the two preceding twenty year periods. Further, the loss in output during the last two recessions has been smaller than what prior experience would lead one to expect. Moreover, the reduction in output volatility is not confined to business cycle frequencies. ; Does the reduction in volatility represent some kind of fundamental, structural change in the economy? Or is it the result of good policy? Or is it the result of good luck? These are the questions that economists are debating in the research literature. Several different arguments have been put forward, but as yet there is no agreement on the cause or causes for the reduced volatility. This Economic Letter reviews and discusses these arguments.

Keywords: Gross domestic product; Production (Economic theory); Business cycles (search for similar items in EconPapers)
Date: 2005
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.frbsf.org/publications/economics/letter/2005/el2005-24.html (text/html)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.frbsf.org/publications/economics/letter/2005/el2005-24.html [301 Moved Permanently]--> https://www.frbsf.org/publications/economics/letter/2005/el2005-24.html)
http://www.frbsf.org/publications/economics/letter/2005/el2005-24.pdf (application/pdf)

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: https://EconPapers.repec.org/RePEc:fip:fedfel:y:2005:i:sep16:n:2005-24

Ordering information: This journal article can be ordered from

Access Statistics for this article

More articles in FRBSF Economic Letter from Federal Reserve Bank of San Francisco Contact information at EDIRC.
Bibliographic data for series maintained by Federal Reserve Bank of San Francisco Research Library ().