Did Leaving the Gold Standard Tame the Business Cycle? Evidence from NBER Reference Dates and Real GDP

Andrew Young, Shaoyin Du

Research output: Contribution to journalArticlepeer-review

Abstract

Cover and Pecorino (2005) claim that the March 1933 departure from the gold standard is the most probable break point ushering in an era of longer U.S. expansions, both absolutely and relative to subsequent recessions. Their analysis is based on cycle durations as defined by National Bureau of Economic Research (NBER) reference dates. However, much of macroeconomic analysis is based on (i) growth cycles (i.e., periods when the economy’s production is above or below trend) rather than absolute increases or decreases in economic activity; and (ii) aggregate time series’ volatility as the prime indicator of macroeconomic stability. In light of this, we reevaluate the March 1933 break point. First, using HP-filtered quarterly gross national product (GNP), our analysis of growth cycle durations still implies a break point near 1933. Second, we test for structural breaks in the volatility of GNP growth rates and deviations from trends. These tests suggest a structural break considerably lat
Original languageEnglish
Pages (from-to)310-327
JournalSouthern Economic Journal
StatePublished - Oct 2009

Fingerprint Dive into the research topics of 'Did Leaving the Gold Standard Tame the Business Cycle? Evidence from NBER Reference Dates and Real GDP'. Together they form a unique fingerprint.

Cite this