America's First Great Moderation. (24th November 2017)

• Record Type: Journal Article
• Authors: Davis, Joseph; Weidenmier, Marc D.
• Is Part Of: Journal of economic history. Volume 77:Number 4(2017)
• Page Start: 1116
• Page End: 1143
• Publication Date: 2017-11-24
• Subjects: Economic history -- Periodicals; 330.9005
• DOI: 10.1017/S002205071700081X
• Languages: English
• ISSNs: 0022-0507

Abstract

Abstract : We identify the longest expansion in U.S. history, a recession-free 16-year period from 1841 to 1856 that we call America's First Great Moderation. Using newer data on industrial production, we show that the record-long expansion was primarily driven by a boom in transportation-goods investment following the discovery of gold in California. Furthermore, the low volatility of industrial production and stock returns during the First Great Moderation, which occurred during a period without a U.S. central bank, is similar to that observed for the Second Great Moderation (1984–2007).