In 1952, the average quarterly volatility of U.S. state employment growth stood at 1.5 percent. By 1995, employment growth volatility came in at just under 0.5 percent. While all states shared in the decline, some states declined much more dramatically than others. We analyze aspects of this...

Many recent studies have identified a decline in the volatility of U.S. real output over the last half century. This study examines a less discussed and analyzed trend, but one as significant as the drop in output volatility, namely a substantial decline in employment volatility during the...

Under the European Monetary Union (EMU), member countries will be subject to common monetary policy shocks. Given the diversity in the economic and financial structures across the EMU economies, these common monetary shocks can be reasonably expected to have different effects. Little is known...

Recent empirical work documents a decline in the U.S. equity premium and a decline in the standard deviation of real output growth. We investigate the link between aggregate risk and the asset returns in a dynamic production based asset-pricing model. When calibrated to match asset return...

The volatility of the U.S. economy since the mid-1980s is much lower than it was during the prior 20-year period. The proximate causes of the increased stability and their relative importance remain unsettled, but the sharpness of the volatility decline and its timing has led authors such as...