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Measures of potential output from an estimated DSGE model of the United States
Juillard, Michel ; Kameník, Ondřej ; Kumhof, Michael ; Laxton, Douglas
This paper develops a DSGE model for the United States that features rational inflation inertia and persistence. The model is estimated with Bayesian-estimation techniques and time-varying inflation objectives to account for movements between regimes. After showing that the model produces forecasts that are quite competitive with other methods writers use the forecasts of the model to generate more robust Hodrick-Prescott filter end-of-sample estimates of the output gap.
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