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Aggregate output volatility falls because the labor market stabilizes on the extensive margin.
Greater financial openness, when accompanied by a high level of financial development, reduces output volatility.
Institutional Causes of Output Volatility, with R. DiCecio, Federal Reserve Bank of St . LouisReview, Volume 92, Issue 3, Pages 205-224, May/June 2010.
In line with existing literature, we confirm the role of increased financial integration and lower output volatility in reducing overall procyclicality.
In a simple calibration exercise, the labor market based mechanism generates a substantial portion of the observed changes in output volatility.
The authors try to predict future levels of output volatility over the next decade by subjecting their economic model to different hypothetical shocks to output, inflation, interest rates and budget deficits, based on the experience of the past two decades.
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This result proved to be robust after stochastic modelling of input and output price volatility.
"There could be some swings this afternoon after the USDA report on farm output, with special volatility in pork bellies".
They found that an improvement in the commodity terms of trade increased output but the volatility of the terms of trade had a negative effect on the primary product exporters.
Second, controlling CPI inflation directly or indirectly induces relatively large volatility in output gap and other inflations.
(3) Based on the output of SimC, the volatility of network evolution is evaluated and an event detection algorithm (EventD) is proposed.
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