"This paper shows how US monetary policy contributed to the drop in the volatility of US output fluctuations and to the … durable consumption and corporate sector investment, inflation and a short-term interest rate. Subsets of the models ….e. changes in the size of monetary policy shocks, affect both the correlation between output components and their volatility. A …

. Smaller Fed policy errors accounted for the fall in inflation volatility. Smaller supply shocks accounted for the fall in … Acceleration and the Great Moderation. The implication is that changing variances of shocks caused the reduction of volatility … output volatility and smaller demand shocks for lower interest rate volatility. The same model with differing Taylor rules of …

There is no consensus about the causes of the reduction in business cycle volatility seen in many major economies over … stability has been fostered by improved monetary policy and by associated changes in the behaviour of inflation, which has … itself led to a reduction in the volatility of economic shocks. Assuming an absence of cataclysmic events, our projections …