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NC State Economist Dr. Mike Walden – “Is the Great Moderation Still with Us?”


Mary:  I’m Mary Walden, with economist MW, welcoming you to the economic perspective.  Today’s program asks if the Great Moderation is still with us.   Mike, the Great Moderation was a term created in the early 2000s to describe the fact that variation in the country’s economic growth rate seemed to have narrowed.  Is the Great Moderation still occurring, and if so, what are the implications?

Mike: Summary Answer

  1. Yes, it does appear to still be occurring
  2. Apart from the Great Recession, the growth rate in the economy has been occurring in a narrow range
  3. Several reasons given – movement from more volatile manufacturing to less volatile services; better production and inventory management with technology, and better monetary policy
  4. One implication – today’s complaint about relatively slow growth – but is it better than faster, yet more volatile, growth?
  5. I’m MW

Mary:  And I’m Mary Walden for N C State Extension