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Federal Reserve Bank of Chicago
Working Paper Series
The Chicago Fed DSGE model
Scott Brave
Jeffrey R. Campbell
Jonas D. M. Fisher
Alejandro Justiniano
Abstract

The Chicago Fed dynamic stochastic general equilibrium (DSGE) model is used for policy analysis and forecasting at the Federal Reserve Bank of Chicago. This article describes its specification and estimation, its dynamic characteristics and how it is used to forecast the US economy. In many respects the model resembles other medium scale New Keynesian frameworks, but there are several features which distinguish it: the monetary policy rule includes forward guidance, productivity is driven by neutral and investment specific technical change, multiple price indices identify inflation and there is a financial accelerator mechanism.


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Scott Brave & Jeffrey R. Campbell & Jonas D. M. Fisher & Alejandro Justiniano, The Chicago Fed DSGE model, Federal Reserve Bank of Chicago, Working Paper Series WP-2012-02, 2012.
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Keywords: Keynesian economics ; Forecasting ; Stochastic analysis
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