The Global Extent of the Great Moderation^*

Abstract

In 2008 the US financial crisis spilled over into a number of other economies causing declines in GDP across the world. Yet the decades preceding the current downturn had been a period of unprecedented stability for the US economy. This article examines annual data for 98 countries over the period 1961-2007 and finds that lower GDP growth volatility in the period preceding the current crisis was not confined to the US. It is detected in a number of developed and developing countries, suggesting that a reduction in volatility in this period was a more general phenomenon.

Impact of capital account liberalization on stock market crashes

“…A significant stream of literature is devoted to analysing the great moderation sources, which is usually regarded as a period of unusual stability in macroeconomic activities (Bernanke, 2004; Ćorić, 2012; Stock & Watson, 2003). This paper is also related to this stream.…”

Nonfinancial sector debt and the U.S. Great Moderation: Evidence from flow‐of‐funds data

“…This "Great Moderation" era saw declines in the volatility of a number of macroeconomic variables in the United States, as in many other countries (Bernanke, 2004;Cecchetti & Krause, 2006;Ćorić, 2012). In the mid-1980s, two shifts occurred in the US economy.…”

“…The second was that macroeconomic volatility declined strongly within a few years. This "Great Moderation" era saw declines in the volatility of a number of macroeconomic variables in the United States, as in many other countries (Bernanke, 2004;Cecchetti & Krause, 2006;Ćorić, 2012). The standard deviation of US quarterly growth and inflation (INF) declined by half and by two thirds since 1984, respectively (Blanchard & Simon, 2001;Carlstrom, Fuerst, & Paustian, 2009).…”