16,000 14,000 12,000 10,000 6,000 6,000 4,000 2,000
1940
FRED
Real Gross Domestic Product (GDPC1) Source: U.S. Department of Commerce: Bureau of Economic Analysis
												
										r		
										/		
												
												
												
												
		1		1	1 1		1		1 ll	\ i		ii
1950
1960
1970
1980
1990
2000
2010
2020
Shaded areas indicate US recessions. 2013 researcri.stlouisfed.org
Lucas (1987)
models of business cycles
Table 1   Cost of reducing growth from ^0 = 0.03 when £ = 0.95
	f(M,Mo)
0.01	0.45
0.02	0.20
0.03	0.00
0.04	-0.17
0.05	-0.31
0.06	-0.42
1
Table 2	Cost of consumption ins		tability: g{a\)
a			
	0.013	0.039	0.120
1	0.00008	0.00072	0.0065
5	0.00042	0.0038	0.034
10	0.00084	0.0076	0.068
20	0.0017	0.015	0.136
[26]
Barlevy (2005)
FIGURE 2	
	Log consumption per capita, 1948-2003 Stabilization corresponds to filling in troughs
10.2 10.0	ln(C*) j. Interpolating NBER peaks -~~^^<JX
9.8	
9.6	
9.4	ln(C*) DeLong \ ■   and Summers ln(C) estimate
9.2	
9.0	
8.8	
1948 '53   '58   '63   '68   '73   '78   '83   '88   '93   '98 2003	
Sources: Consumption data from the Bureau of Economic Analysis; population data from the Census Bureau.	
2
FIGURE 3
Log consumption per capita* 1948-2003
1948  53   r58   '63   '68   n73   '78   n33    '88   r93   '98 2003
Sources: Consumption data from the Bureau of Economic Analysis; population data from the Census Bureau.
3