251,788 research outputs found

    Oil and the Great Moderation

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    We assess the extent to which the period of great U.S. macroeconomic stability since the mid-1980s can be accounted for by changes in oil shocks and the oil share in GDP. To do this we estimate a DSGE model with an oil-producing sector before and after 1984 and perform counterfactual simulations. We nest two popular explanations for the Great Moderation: (1) smaller (non-oil) real shocks; and (2) better monetary policy. We find that the reduced oil share accounted for as much as one-third of the inflation moderation and 13% of the growth moderation, while smaller oil shocks accounted for 11% of the inflation moderation and 7% of the growth moderation. This notwithstanding, better monetary policy explains the bulk of the inflation moderation, while most of the growth moderation is explained by smaller TFP shocks.Monetary policy ; Petroleum products - Prices ; Business cycles

    A Year Without a Smartphone

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    Some say there are moderators and abstainers. One post, call or text with “off” energy, unfortunately, would get me down for days, sometimes more, so for the time being, I abstained. Moderation requires more discipline. I hoped detaching from tech would help me build up to moderation

    A soothing invisible hand: moderation potentials in optimal control

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    A moderation incentive is a continuously differentiable control-dependent cost term that is identically zero on the boundary of the admissible control region, and is subtracted from the `do or die' cost function to reward sub-maximal control utilization in optimal control systems. A moderation potential is a function on the cotangent bundle of the state space such that the solutions of Hamilton's equations satisfying appropriate boundary conditions are solutions of the synthesis problem - the control-parametrized Hamiltonian system central to Pontryagin's Maximum Principle. A multi-parameter family of moderation incentives for affinely controlled systems with quadratic control constraints possesses simple, readily calculated moderation potentials. One member of this family is a shifted version of the kinetic energy-style control cost term frequently used in geometric optimal control. The controls determined by this family approach those determined by a logarithmic penalty function as one of the parameters approaches zero, while the cost term itself is bounded.Comment: 26 pages, 6 figure

    What's so Great about the Great Moderation? A Multi-Country Investigation of Time-Varying Volatilities of Output Growth and Inflation

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    Changes in volatility of output growth and inflation are examined for eight countries with at least 140 years of uninterrupted data. Time-varying parameter vector autoregressions are used to estimate standard deviations of each variable. Both volatilities rise quickly with World War I and its aftermath, stay relatively high until the end of World War II, and then drop rapidly until the mid- to late 1960s. This Postwar Moderation typically yields the largest decline in output growth volatilities. For all countries, volatilities of both output growth and inflation fall more during this Postwar Moderation than during the Great Moderation, and often the difference is huge. Both volatilities typically reach their lowest levels following the Great Moderation. The Great Moderation often counteracts an increase in volatility that took place in the 1970s, particularly for inflation. In nearly all the countries in our sample, the recent financial crisis has eliminated the stability gains associated with the Great Moderation, and sometimes it has even eroded gains made during the Postwar Moderation. Periods in which a fixed exchange rate system was widespread are associated with relatively low volatilities for both variables. Based on our structural VAR identification, permanent shocks to output account for nearly all of the fluctuations in the volatility of output growth while shocks that have only a temporary effect on output explain most of the fluctuations in inflation volatility. These last two findings suggest that changes in the volatility for each variable are primarily driven by a fundamentally different type of disturbance.The Great Moderation, The Postwar Moderation, stochastic volatility, permanent-transitory shock decompositions, Markov Chain Monte Carlo, structural vector autoregressions.

    Mortgage Lending and the Great moderation: a multivariate GARCH Approach

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    Financial innovation during the Great Moderation increased the size and scope of credit flows in the US. Credit flows increased both in volume and with regard to the range of activities and investments that was debt-financed. This may have contributed to the reduction in output volatility that was the Great Moderation. We hypothesize that during the Great Moderation (i) growth in mortgage finance partly decoupled from fundamentals as measured by overall output growth and (ii) this allowed mortgages less to finance residential investment and more to finance spending on other GDP components. We document that the start of the Moderation coincided with a surge in bank credit creation (especially mortgage credit), a rise in property income, a rise in the consumption share of GDP, and a change in correlation (from positive to negative) between consumption and non-consumption GDP components (investment, export and government expenditure). In a multivariate GARCH framework, we observe unidirectional causality in variance from total output to mortgage lending before the Great Moderation, which is no longer detectable during the Great Moderation. We also find that bidirectional causality in variance of home mortgage lending and residential investment existed before, but not during the Great Moderation. Both these findings are consistent with a role for credit dynamics in explaining the Great Moderation.great moderation; mortgage credit; multivariate GARCH; causality

    Moderation through exclusion? The journey of the Tunisian Ennahda from fundamentalist to conservative party

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    The success of processes of democratic change is often predicated on the moderation of anti-systemic and extremist parties. The literature on such parties argues that such moderation, namely the acceptance of democratic procedures, human rights, and a market economy, comes about through inclusion. This seems to be borne out when one analyses a number of Islamist parties having contributed to the progressive democratization of their respective countries. The Tunisian case, however, offers a different perspective on moderation. This article argues that it has been exclusion through repression and social marginalization that has led the Islamist party Ennahda to move from its extreme anti-systemic position of the 1970s to become the mainstream conservative party it is today

    Great Moderation(s) and U.S. Interest Rates: Unconditional Evidence

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    The US economy experienced a Great Moderation sometime in the mid-1980s -- a fall in the volatility of output growth -- at the same time as a fall in both the volatility of inflation and the average rate of inflation. We put this moderation in historical perspective by comparing it to the post-WWII moderation. According to theory, the statistical moments -- both real and nominal -- that shift during these moderations in turn influence interest rates. We examine the predictions for shifts in the unconditional average of US interest rates. A central finding is that such shifts probably were due to changes in average inflation rather than to those in the variances of inflation and consumption growth.great moderation, asset pricing

    Consensus Moderation System

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    The present paper formulates a consensus moderation system based on the negotiation of the actors involved. There are a series of steps in the moderation process, the first of which is constructing a front of Pareto optimal solutions. Since this in itself will likely not lead to consensus in a real life scenario, Kaldor-Hicks compromises are then detected. Compromises are recommended at every iteration of the negotiation process which can lead to a lengthy negotiation time, which is addressed by using a recommendation engine based on the previous behavior of the actor.Pareto Optimality, Kaldor-Hicks Compromises, Consensus Model, Consensus Moderation

    The great moderation: good luck, good policy, or less oil dependence?

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    Three explanations have been suggested for the moderation in real GDP and inflation that has occurred in industrialized countries since the 1980s: good luck, better monetary policy, and structural changes in the economy. Recent research finds that better monetary policy explains most of the moderation in inflation, and good luck and the less-intensive use of oil (a structural change) have played a major role in the moderation of GDP.Petroleum products - Prices ; Economic conditions ; Monetary policy
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