Transcripts of the monetary policymaking body of the Federal Reserve from 2002–2008.

I don’t know of any particular research that bears exactly on that question about whether or not we can identify cyclical service industries. For the most part, your basic point is well taken, which is that the service sector is larger, more stable, less interest sensitive, less prone to the kind of inventory backups and consequent significant production cuts and cyclical behavior than the manufacturing and construction sectors. Obviously the size of those two sectors has evolved, and it’s conceivable that the economy itself will become less cyclical; but we’d still be thinking that if you’re worried about cyclical turning points, the first place that you are likely to see them is in the durable goods and manufacturing and construction areas. I think a reasonable research topic would ask whether or not the economy is changing in ways that one could find cyclical behavior in the service employment side of things, and I just don’t know what the answer to that is.

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