Rochelle M. Edge, Michael T. Kiley, and Jean-Philippe Laforte
Abstract: This paper provides documentation for the large-scale estimated DSGE model of the U.S. economy used in Edge, Kiley, and Laforte (2007). The model represents part of an ongoing research project (the Federal Reserve Board's Estimated, Dynamic, Optimization-based--FRB/EDO--model project) in the Macroeconomic and Quantitative Studies section of the Federal Reserve Board aimed at developing a DSGE model that can be used to address practical policy questions and the model documented here is the version that was current at the end of 2006. The paper discusses the model's specification, estimated parameters, and key properties.
Keywords: Two-sector growth model, sticky-prices, sticky-wages, habit-persistence, investment adjustment costs, variable utilization, Bayesian estimationFull paper (596 KB PDF) | Full paper (Screen Reader Version)