Explaining the Great Moderation: It is Not the Shocks
15 Pages Posted: 6 Jun 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: Great Moderation, Information, Shocks
JEL Classification: C32, C53, E32, E37
Suggested Citation: Suggested Citation