On the Typical Spectral Shape of an Economic Variable

In a classic article, Granger (1966) asserted that most economic time series measured in level have spectra that exhibit a smooth declining shape with considerable power at very low frequencies. There has been no systematic attempt to examine Granger's assertion. We estimate output level spectra for 58 countries, divided into developed, high-income developing, and low-income developing groups. We find the shapes of the estimated spectra to be strikingly similar to Granger's typical shape, particularly for the developed countries.