Natural Rate Measures in an Estimated DSGE Model of the U.S. Economy
Preprint
- 1 March 2007
- preprint
- Published by Elsevier in SSRN Electronic Journal
Abstract
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.Keywords
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