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Natural rate measures in an estimated DSGE model of the U.S. economy

  • Edge, Rochelle M.
  • Kiley, Michael T.
  • Laforte, Jean-Philippe

This paper presents a monetary DSGE model of the U.S. economy. The model captures the most important production, expenditure, and nominal-contracting decisions underlying economic data while remaining sufficiently small to allow it to provide a clear interpretation of the data. We emphasize the role of model-based analyses as vehicles for storytelling by providing several examples--based around the evolution of natural rates of production and interest--of how our model can provide narratives to explain recent macroeconomic fluctuations. The stories obtained from our model are both similar to and quite different from conventional accounts.

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Article provided by Elsevier in its journal Journal of Economic Dynamics and Control.

Volume (Year): 32 (2008)
Issue (Month): 8 (August)
Pages: 2512-2535

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Handle: RePEc:eee:dyncon:v:32:y:2008:i:8:p:2512-2535
Contact details of provider: Web page: http://www.elsevier.com/locate/jedc

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  7. Rochelle M. Edge & Michael T. Kiley & Jean-Philippe Laforte, 2008. "A Comparison Of Forecast Performance Between Federal Reserve Staff Forecasts, Simple Reduced-Form Models, And A Dsge Model," CAMA Working Papers 2009-03, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
  8. Karl Whelan, 2003. "A two-sector approach to modeling U.S. NIPA data," Open Access publications 10197/203, School of Economics, University College Dublin.
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