Permanent and Transitory Components in Macroeconomic Fluctuations

Abstract

Fluctuations in real GNP have traditionally been viewed as transitory deviations from a deterministic time trend.The purpose of this paper -is to review some of the recent developments that have led to a new view of output fluctuations and then to provide some additional evidence.Using post-war quarterly data, it is hard to reject the view that real GNP is as persistent as a random walk with drift.We also consider the hypothesis that the recent finding of persistence are due to the failure to distinguish the business cycle from other fluctuations in real GNP.We use the measured unemployment rate to decompose output fluctuations.We find no evidence for the view that business cycle fluctuations are more quickly trend-reverting.

Cite this work

No public copy is stored for this record, so only the metadata is cited.

Stored only when both papers are in the corpus — 253 citations exist upstream.

Papers that cite the same references — the relational fallback while embeddings are still backfilling.