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What is a good response to the Information below? Opinion.. Economists have three possible theories for the cause of the Great Moderation, structure if the

What is a good response to the Information below?

Opinion..

Economists have three possible theories for the cause of the Great Moderation, structure if the economy, good policy, and good luck. Structural changes in the economy can reduce volatility. Advances in information technology and communications allowed firms to be more efficient in the production process, which reduces volatility. More open international trade and capital flows may have helped stabilize the economy. Good monetary policy may be another reason for the Great Moderation. Economists think monetary policy was weaker before Great Moderation and stronger during. Economists also think the United States may have been lucky that shocks were than the shocks hitting the economy during the 1960s and 1970s.

I think the Great Moderation was caused by structural change like advances in the technology; improved macroeconomic policies, which helped moderate, the large boom and bust cycles. We currently make advances in technology, which improves the way we produce things. Information technology is improving every year making it more efficient to produce and monitor production. The combination of improved monetary policy, which helped lower and stabilize inflation and better inventory management techniques may have contributed importantly to lower GDP volatility. In the next 10 to 20 years, with continued advances in technology and economic policies, you can expect to see this patter to continue.

In our advancements in information technology and communications allows us to make accurate decisions and become more efficient at the production process. With accurate information we are able to make better economic policies, which helps us keep the economy stabilized. This is something economist and firms didn't have in the past. We are able to adjust when we have a recession and recover much faster than we could've in the past.

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