DSGE Models for Monetary Policy Analysis
Lawrence J. Christiano
Northwestern University; Federal Reserve Bank of Cleveland; Federal Reserve Bank of Chicago; Federal Reserve Bank of Minneapolis; National Bureau of Economic Research (NBER)
Board of Governors of the Federal Reserve System (FRB); Sveriges Riksbank
Federal Reserve Bank of Atlanta CQER Working Paper No. 10-02
Monetary DSGE models are widely used because they fit the data well and can be used to address important monetary policy questions. We provide a selective review of these developments. Policy analysis with DSGE models requires using data to assign numerical values to model parameters. The paper describes and implements Bayesian moment matching and impulse response matching procedures for this purpose.
Number of Pages in PDF File: 94
Keywords: Taylor rule, labor supply, boom, output gap, unemployment, Bayesian inference, vector autoregression, posterior distribution
JEL Classification: E2, E3, E5, J6working papers series
Date posted: September 23, 2010
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