Explaining the Great Moderation: It is Not the Shocks
20 Pages Posted: 26 Feb 2008
Date Written: February 2008
This paper shows that the explanation of the decline in the volatility of GDP growth since the mid-eighties is not the decline in the volatility of exogenous shocks but rather a change in their propagation mechanism.
Keywords: Shocks, Information, Great Moderation
JEL Classification: E32, E37, C32, C53
Suggested Citation: Suggested Citation