The sources of the decline in U.S. output volatility

Kyongwook Choi, Chulho Jung

Research output: Contribution to journalArticlepeer-review

1 Scopus citations

Abstract

In this paper, we investigate the sources of the decline in U.S. output volatility. We estimate structural vector autoregression models before and after the structural break date of the first quarter of 1984. We find that the magnitude of both supply and demand shocks in the pre-1984 period is greater than that in the post-1984 period. We also find that the relative importance of the demand shocks in the post-1984 has decreased drastically compared to the pre-1984 period. Further counterfactual analyses show that good luck, good policies, and better business practices might have played a role in reducing U.S. output volatility. (JEL E30, E60, C32).

Original languageEnglish
Pages (from-to)132-144
Number of pages13
JournalContemporary Economic Policy
Volume26
Issue number1
DOIs
StatePublished - Jan 2008

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