TY  - JOUR
AU  - Hall,Robert E.
TI  - Spontaneous Volatility of Output and Investment
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 3144
PY  - 1989
Y2  - October 1989
UR  - http://www.nber.org/papers/w3144
L1  - http://www.nber.org/papers/w3144.pdf
N1  - Author contact info:
Robert E. Hall
Hoover Institution
Stanford University
Stanford, CA  94305-6010
Tel: 650/723-2215
E-Mail: rehall@gmail.com
AB  - Spontaneous shifts in output originating within the business sector are an important factor in aggregate fluctuations. This paper develops a simple two-component decomposition of the movement of real GNP. One component is the path that GNP would have followed in order to deliver the volume of goods and services actually taken by consumers, government, and the rest of the world. The second component, noise, is the residual between actual GNP and the theoretical calculation. The two components are of roughly the same size, but noise has more of its power at higher frequencies.
ER  -