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Output Fluctuations in the United States: What Has Changed since the Early 1980's?

  • Gabriel Perez-Quiros
  • Margaret M. McConnell

In this paper, we document a structural break in the volatility of U.S. GDP growth in the first quarter of 1984 and provide evidence that this break emanates from a reduction in the volatility of durable goods production. Further, the reduction in durables volatility corresponds to a decline in the share of durable goods accounted for by inventories. We find no evidence of increased stability in the nondurables, services or structures sectors of the economy. Our evidence is compatible with a scenario in which changes in inventory management techniques in the durable goods sector have reduced the variability of aggregate output.

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Article provided by American Economic Association in its journal American Economic Review.

Volume (Year): 90 (2000)
Issue (Month): 5 (December)
Pages: 1464-1476

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Handle: RePEc:aea:aecrev:v:90:y:2000:i:5:p:1464-1476
Note: DOI: 10.1257/aer.90.5.1464
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