The Tell: Has the ‘Great Moderation’ returned — and is that a good thing?

Have we returned to the Great Moderation?

That was the question posed by Paul Ashworth, chief U.S. economist for Capital Economics, in a note out Wednesday. The “Great Moderation” is the name often given to the period from the mid-1980s to 2007, when the Federal Reserve kept inflation and economic growth relatively stable… until it all collapsed in spectacular fashion in the global financial crisis of 2008.

While Ashworth’s analysis examines whether the Moderation is back, it also asks another important question: is that good?

First to the definition: “The Great Moderation in the volatility of GDP growth and price inflation, which began in the 1980s, came to an abrupt end with the onset of the financial crisis in 2008 but, a decade later, what stands out again is just how stable economic growth and price pressures have been,” Ashworth wrote.