DP6600 | Explaining The Great Moderation: It Is Not The Shocks

Publication Date

14/12/2007

JEL Code(s)

  • C32, C53, E32, E37

Keyword(s)

  • Great Moderation, Information, shocks

Programme Area(s)

  • International Macroeconomics

Abstract

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.