On the sources of the great Moderation

Jordi Galí, Luca Gambetti

Research output: Contribution to journalArticleResearchpeer-review

180 Citations (Scopus)


The Great Moderation in the US economy has been accompanied by large changes in the comovements among output, hours, and labor productivity. Those changes are reflected in both conditional and unconditional second moments as well as in the impulse responses to identified shocks. Among other changes, our findings point to an increase in the volatility of hours relative to output, a shrinking contribution of nontechnology shocks to output volatility, and a change in the cyclical response of labor productivity to those shocks. That evidence suggests a more complex picture than that associated with "good luck" explanations of the Great Moderation.
Original languageEnglish
Pages (from-to)26-57
JournalAmerican Economic Journal: Macroeconomics
Publication statusPublished - 1 Feb 2009


Dive into the research topics of 'On the sources of the great Moderation'. Together they form a unique fingerprint.

Cite this