pesavento_03

Emory University
Department of Economics
Working Papers

Title:

The Decline In US Output Volatility: Structural Changes in Inventories or Sales? *

Number: 03-01

Author: Ana María Herrera and Elena Pesavento

Issue Date: January 2003 (revised, August 2004)

Abstract: Explanations for the decline in US output volatility since the mid-1980s comprise: "better policy", "good luck", and technological change. Our multiple break estimates suggest that reductions in volatility since the mid-1980s extend not only to manufacturing inventories but also to sales. This finding, along with a concentration of the reduction in the volatility of inventories in material and supplies, and the lack of a significant break in the inventory-sales covariance, imply that new inventory technology cannot account for the majority of the decline in output volatility.

* Journal of Business and Economic Statistics, forthcoming

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Title:	The Decline In US Output Volatility: Structural Changes in Inventories or Sales? *
Number:	03-01
Author:	Ana María Herrera and Elena Pesavento
Issue Date:	January 2003 (revised, August 2004)
Abstract:	Explanations for the decline in US output volatility since the mid-1980s comprise: "better policy", "good luck", and technological change. Our multiple break estimates suggest that reductions in volatility since the mid-1980s extend not only to manufacturing inventories but also to sales. This finding, along with a concentration of the reduction in the volatility of inventories in material and supplies, and the lack of a significant break in the inventory-sales covariance, imply that new inventory technology cannot account for the majority of the decline in output volatility.