Question

The period following World War II, where fluctuations in GDP have been smaller, is known as... The stable period Quantitative easing The flat of the curve The great moderation

Answer 1

The perfod of unusually stable macro Economic activity experienced in the us that began in the mid-eightees is known as Gread moden alin. Kim and Nelson (1999) and mcConnell and penez Quirus (2000) were the 1st to document the substantial decline in us outpul vola fility in 1984 But the academic and non academic litena kure on the Great moderation &s prolific. 1st the Great moderation has never before been studies) in a long historical perspect tre as pre rious studies only use pork would wane a daka. Can the Gread moderation Be Identified when considering a longen of alased. We canefully analyse all these technical tesues using post World Wanadata. We uce deels that can Idendo by more than one Break out we find no evidence of additional Breaks associated With the Greal Pecession, only the one of the Gread moderation. The Great moderation is not over in spite of the Gread Recession even if we use a histe nical datased begining in the 19th cen- tuny. The Gread moderation was smiginally associated with a decrease in outpul ro. latility and was considered a great achievement in ferms of Reducing Rick and of decreasing the Frequency and

depth of Recensions Hoeren, afhen carefully analysing the chanachenistice of the Gread moderation, they seem to be more clearly associated with the shape of expansions. Both rola tile typically reach their lowest loved following the Gread moderation. The Gread modenadion of ten wunden acts an Increase in volatility that took place in the 1970s. particularly For Infladion In nearly all the coun tries in our sample, the Recent Finan riad misis has eliminated the sha bility gains assocrated with Great moderation and sometimes it has even enoded gains made during the post wan modenadion periode in which a fixed exchange Rate system was widespread are accociated with Relatively low volatile for both Variables. Redning Inflafton and eshablishing Basic price stability laid the Foundadion for the Gread moderation But in looking for deep. en Resuns, economisk have genen all proposed three Reasuns: changes in the structure of the economy cho ng es in the structure of the in nomy Can Reduce volatility,