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GREAT MODERATION AND GREAT RECESSION: FROM PLAIN SAILING TO STORMY SEAS?
Author(s) -
Gadea María Dolores,
GómezLoscos Ana,
PérezQuirós Gabriel
Publication year - 2018
Publication title -
international economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.658
H-Index - 86
eISSN - 1468-2354
pISSN - 0020-6598
DOI - 10.1111/iere.12337
Subject(s) - great moderation , recession , volatility (finance) , economics , great recession , moderation , keynesian economics , monetary economics , global recession , macroeconomics , econometrics , mathematics , statistics
Many have argued that the Great Recession of 2008 marks the end of the reduction in output volatility known as the Great Moderation. This article shows that this is not the case through an empirical analysis. Output volatility remains subdued despite the output loss of the Great Recession. This finding has important implications for policymaking because we also find that a lower volatility of output is associated with slower recoveries.