DP6600 Explaining The Great Moderation: It Is Not The Shocks
|Author(s):||Domenico Giannone, Michele Lenza, Lucrezia Reichlin|
|Publication Date:||December 2007|
|Keyword(s):||Great Moderation, Information, Shocks|
|JEL(s):||C32, C53, E32, E37|
|Programme Areas:||International Macroeconomics|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=6600|
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.