The role of output composition in the stabilization of US output growth
US output growth became much more stable over the past half-century. This paper assesses the role of changes in the composition of output | the increasing importance of stable sectors and diminishing importance of volatile sectors | in this stabilization. Our decomposition of output growth volatility by one-digit industry indicates that a bit less than half of the drop in volatility between the pre- and post-1982 periods is accounted for by compositional shifts, most notably the decline of manufacturing.
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- Gabriel Perez-Quiros & Margaret M. McConnell, 2000.
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- Andrew J. Filardo, 1997. "Cyclical implications of the declining manufacturing employment share," Economic Review, Federal Reserve Bank of Kansas City, issue Q II, pages 63-87.
- Olivier Blanchard & John Simon, 2001. "The Long and Large Decline in U.S. Output Volatility," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 32(1), pages 135-174.
- Veronica C. Warnock & Francis E. Warnock, 2000. "The declining volatility of U.S. employment: was Arthur Burns right?," International Finance Discussion Papers 677, Board of Governors of the Federal Reserve System (U.S.).
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