Many have argued that the Great Recession of 2008 marks the end of the reduction in output volatility known as the Great Moderation. This article shows that this is not the case through an empirical analysis. Output volatility remains subdued despite the output loss of the Great Recession. This finding has important implications for policymaking because we also find that a lower volatility of output is associated with slower recoveries.
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Rivas et al. (2018) studied this question.
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