Abstract
During the second half of the last century, the output volatility of the US economy shrank significantly. This increased stability mainly reflects a reduced dispersion of private consumption as well as capital expenditures about their respective trends. In addition, the standard deviation of inflation was, over time, substantially compressed. Moreover, and possibly as a consequence, the duration of expansions was considerably extended (Romer 1999 and Blanchard and Simon 2001). The recovery, which began, after a double dip, in 1982, had a duration of 33 quarters. And the following upswing, starting in March 1991, proved to be very long-lasting as well.
Horst Siebert’s always inspiring work has an enormous breadth and reach. Thus one can be sure that one does not come close to being acquainted with all of his remarkable output. Still, while perusing through his volumnious and, of course, still growing work we detected a subject to which he has somehow given short shrift. Since this topic is of significant importance to central banks, our small gift might be rubricated under the food-for-thought heading.
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Hesse, H., Kotz, HH. (2003). Financial Cycles, Real Cycles and Monetary Policy. In: Pethig, R., Rauscher, M. (eds) Challenges to the World Economy. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-19018-6_15
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DOI: https://doi.org/10.1007/978-3-642-19018-6_15
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