Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
958253 | Journal of Economics and Business | 2006 | 15 Pages |
Abstract
This paper asks whether the remarkable decrease in business-cycle variability after the end of World War II has been the result of a more stable structure (the propagation mechanism) or less volatile shocks (the impulses). Using data from the pre-World War I, interwar, and post-World War II periods, for the US, Australia, Italy, Sweden, and the UK, our evidence suggests that the reduced volatility is mostly the result of calmer shocks, and less the consequence of a more stable structure. In the US, for example, we calculate that milder shocks have been responsible for around 80% of the reduction in output variability between interwar and postwar periods, while a more stable structure is responsible for the remaining 20%.
Keywords
Related Topics
Social Sciences and Humanities
Business, Management and Accounting
Strategy and Management
Authors
Georgios Karras, Jin Man Lee, Houston Stokes,