Current Issues in Economics and Finance

A Decomposition of the Increased Stability of GDP Growth

August 1999Volume 5, Number 13
JEL classification: E3, E22, E32

Authors: Margaret M. McConnell, Patricia C. Mosser, and GabrielPerez Quiros

Since 1984, the U.S. economy has grown at a remarkably steady pace. An analysis of this increased stability shows that every major component of GDP has exhibited smoother growth. However, two components—inventory investment and consumer spending—are responsible for the bulk of the decline in overall volatility.

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