Current Issues in Economics and Finance
A Decomposition of the Increased Stability of GDP Growth
August 1999 Volume 5, Number 13
JEL classification: E3, E22, E32

Authors: Margaret M. McConnell, Patricia C. Mosser, and Gabriel Perez 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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