Preliminary , Incomplete Draft Changes in the Volatility of Economic Activity at the Macro and Micro Levels

@inproceedings{Davis2007PreliminaryI,
  title={Preliminary , Incomplete Draft Changes in the Volatility of Economic Activity at the Macro and Micro Levels},
  author={Steven J. Davis and James A. Kahn},
  year={2007}
}
We review evidence on the Great Moderation in conjunction with evidence about volatility trends at the micro level. We combine the two types of evidence to develop a tentative story for important components of the aggregate volatility decline and its consequences. The key ingredients of the story are declines in firm-level volatility and aggregate volatility – most dramatically in the durable goods sector – but the absence of a decline in the volatility of household consumption and individual… CONTINUE READING