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Did Leaving the Gold Standard Tame the Business Cycle? Evidence from NBER Reference Dates and Real GNP


  • Andrew T. Young

    () (Department of Economics, 371 Holman Hall, University of Mississippi, University, MS 38677, USA; Tel.662-915-5829)

  • Shaoyin Du

    () (Department of Economics, University of Mississippi, University, MS 38677, USA)


Cover and Pecorino (2005) claim that the March 1933 departure from the gold standard is the most probable break point ushering in an era of longer U.S. expansions, both absolutely and relative to subsequent recessions. Their analysis is based on cycle durations as defined by National Bureau of Economic Research (NBER) reference dates. However, much of macroeconomic analysis is based on (i) growth cycles (i.e., periods when the economy’s production is above or below trend) rather than absolute increases or decreases in economic activity; and (ii) aggregate time series’ volatility as the prime indicator of macroeconomic stability. In light of this, we reevaluate the March 1933 break point. First, using HP-filtered quarterly gross national product (GNP), our analysis of growth cycle durations still implies a break point near 1933. Second, we test for structural breaks in the volatility of GNP growth rates and deviations from trends. These tests suggest a structural break considerably later than 1933, perhaps as late as the 1950s.

Suggested Citation

  • Andrew T. Young & Shaoyin Du, 2009. "Did Leaving the Gold Standard Tame the Business Cycle? Evidence from NBER Reference Dates and Real GNP," Southern Economic Journal, Southern Economic Association, vol. 76(2), pages 310-327, October.
  • Handle: RePEc:sej:ancoec:v:76:2:y:2009:p:310-327

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    Cited by:

    1. WenShwo Fang & Stephen M. Miller, 2014. "Output Growth and its Volatility: The Gold Standard through the Great Moderation," Southern Economic Journal, Southern Economic Association, vol. 80(3), pages 728-751, January.

    More about this item

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General


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