Title

Has the Business Cycle Changed? Evidence and Explanations

Author(s)

James H. Stock James Stock (Harvard University)

Mark W. Watson Mark Watson (Princeton University)

Abstract

Over the past 30 years, economic activity has become less volatile in most G7 countries. In the US, for example, the standard deviation of the growth rate of GDP, averaged over four quarters, was one-third less during 1984 to 2002 than it was during 1960 to 1983. This decline in volatility is widespread across sectors within the US and is also found in the other G7 economies, although the timing and details differ from one country to the next. Interestingly, despite these changes and increasing international economic integration, output fluctuations have not become more correlated or synchronized across countries.

Creation Date

2003-08

Section URL ID

Paper Number

2003-2

URL

http://www.princeton.edu/~mwatson/papers/jh_2.pdf

File Function

Jel

E30

Keyword(s)

Business Cycle

Suppress

false

Series

13