- In this folder, you can find a set of codes that generates the posterior estimates of parameters in the baseline model. - Software and operating system used: MATLAB R2020a; Windows 10 Pro - Last modified: 8/26/2023 "main.m" runs the SMC algorithm to estimate the model. This file uses procedures collected in the subfolders. - MATLAB codes are based on the set of replication codes for Herbst and Schorfheide (2015) "Bayesian Estimation of DSGE Models" Princeton University Press: available at https://web.sas.upenn.edu/schorf/companion-web-site-bayesian-estimation-of-dsge-models/ - MATLAB Parallel Computing Toolbox is used in the SMC algorithm. - The baseline model is specified in the files "model_solution.m" and "model_solution2.m" of the folder "Mfiles". - The seed for random numbers is set by "rng(0)" in "main.m". - Computation time: 347 minutes for the pre-1979 sample and 153 minutes for the post-1982 sample, using a workstation with two CPUs (Intel Xeon E-2630 v4, 20 cores in total). "us1966Q11979Q2.txt" and "us1982Q42008Q4.txt" are the data files for output growth, consumption growth, investment growth, hours worked wage growth, inflation, and the federal fund rate. The data are constructed in the Excel file "DataforMediumDSGE.xlsx." "prior_dsge.txt" specifies prior distributions. "bound_dsge.txt" specifies the upper and lower bounds of the prior distributions. "TablesPredictability.m' calculates the variances and predictability measures reported in Tables 3 and 4, using files collected in the subfolders.