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...

A simple monetary model with increasing consumption variety is used to examine issues surrounding optimal monetary policy and its implementation. When consumption variety is increasing, there is a wedge driven between inflation measured in terms of goods prices and inflation measured in terms of...

The authors investigate an international monetary business-cycle model in which agents face monetary policy processes that incorporate regime shifts. In any given period agents cannot directly observe the policy regime, but instead form beliefs that are updated via Bayesian learning. As a...

This paper develops and illustrates a simple method to generate a DSGE model-based forecast for variables that do not explicitly appear in the model (non-core variables). We use auxiliary regressions that resemble measurement equations in a dynamic factor model to link the non-core variables to...

We use a structural dynamic stochastic general equilibrium model to investigate how initial data releases of key macroeconomic aggregates are related to final revised versions and how identified aggregate shocks influence data revisions. The analysis sheds light on how well preliminary data...

This study documents a general decline in the volatility of employment growth during the period 1956 to 2005 and examines its possible sources. Estimates from a state-level pooled cross-section/time-series model indicate that aggregate and state-level factors each account for an important share...

Cyclical dynamics at the regional level are investigated using newly developed time-series techniques that allow a decomposition of aggregate data into common trends and common cycles. We apply the common-trend/common-cycle representation to per capita personal income for the eight BEA regions...

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...

This paper develops and illustrates a simple method to generate a DSGE model-based forecast for variables that do not explicitly appear in the model (non-core variables). We use auxiliary regressions that resemble measurement equations in a dynamic factor model to link the non-core variables to...