Good luck, in the sense of a smaller variance of the shocks hitting the global economy, is widely believed to have played an important role as well. [4] Compared with the 1970s, for example, real oil prices traded in a much narrower range from the second half of the 1980s until the mid-2000s.
The question I would like to discuss this morning is whether the pandemic, and more recently Russia’s invasion of Ukraine, will herald a turning point for macroeconomic stability – that is, whether the Great Moderation will give way to a period of “Great Volatility” – or whether these shocks, albeit significant, will ultimately prove temporary, as was the case for the global financial crisis.