@article{Nason:273616, recid = {273616}, author = {Nason, James M. and Smith, Gregor W.}, title = {Great Moderation(s) and U.S. Interest Rates: Unconditional Evidence}, address = {2007-11}, number = {2110-2018-4265}, series = {Working Paper No. 1140}, pages = {36}, year = {2007}, abstract = {The US economy experienced a Great Moderation sometime in the mid-1980s – a fall in the volatility of output growth – at the same time as a fall in both the volatility of inflation and the average rate of inflation. We put this moderation in historical perspective by comparing it to the post-WWII moderation. According to theory, the statistical moments – both real and nominal – that shift during these moderations in turn influence interest rates. We examine the predictions for shifts in the unconditional average of US interest rates. A central finding is that such shifts probably were due to changes in average inflation rather than to those in the variances of inflation and consumption growth.}, url = {http://ageconsearch.umn.edu/record/273616}, doi = {https://doi.org/10.22004/ag.econ.273616}, }