Reply To: Great Moderation


After reading the paper by Peter Summers, I find it most unconvincing. 1. Arriving at GDP is a process of aggregating thousands of sets of diverse data. 2. Arriving at this aggregate for 37 discrete GDPs (1966-2002) where the the sets of data for each year’s GDP would contain new array of data from the previous year (if accurately compiled). 3. Inflation is never actually defined (CPI, PPI, money supply, M1, M2, M3, etc.). 4. How often were the rules for calculating the aggregate change across the years from 1966-2002? 5. Is it too cynical to suggest that numbers are often fudged for the current administration? 7. a. Finally the thesis: The Great Moderation happened as a result of improved monetary policy, 7. b. The source: Peter M. Summers is an assistant economics professor at Texas Tech University. This
article was written while he was a visiting scholar at the Federal Reserve Bank of
Kansas City. Matthew Cardillo, an associate economist at the bank, helped prepare
the article. The article is on the bank’s website at