Output Fluctuations in the United States: What Has Changed Since the Early 1980s?

34 Pages Posted: 20 Oct 2006

Date Written: June 1998

Abstract

We document a structural break in the volatility of U.S. GDP growth in the first quarter of 1984, and provide evidence that this break emanates from a reduction in the volatility of durable goods production. We find no evidence of increased stability in the nondurables, services or structures sectors of the economy. In addition, no other G7 country experienced a contemporaneous reduction in output volatility. Finally, we show that the reduction in durables volatility corresponds to a decline in the share of durable goods accounted for by inventories.

JEL Classification: E32, C22

Suggested Citation

McConnell, Margaret (Meg) Mary and Perez-Quiros, Gabriel, Output Fluctuations in the United States: What Has Changed Since the Early 1980s? (June 1998). FRB of New York Staff Report No. 41. Available at SSRN: https://ssrn.com/abstract=938810 or http://dx.doi.org/10.2139/ssrn.938810

Margaret (Meg) Mary McConnell (Contact Author)

Federal Reserve Bank of New York ( email )

33 Liberty Street
New York, NY 10045
United States

Gabriel Perez-Quiros

Banco de España ( email )

Madrid 28014
Spain

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