/ / www. federalreserve. gov / econresdata / edo / edo - models - about. htm, and https : / / www. federalreserve. gov / pubs / ifdp / 2005 / 835 / ifdp835r. pdf. one reason why the frb / us model is well known is that it is in the public domain and is regularly updated for public use, including the provision of a database that is constructed using the median projections from the most recent sep. see brayton, laubach, and reifschneider ( 2014a ) for a broad description of the model and reifschneider, ttlow, and williams ( 1999 ) for a description and explanation of model properties. brayton and others ( 1997 ) provides an accessible summary of the role and importance of expectations formation in the frb / us model. the frb / us model is unfashionable by current academic standards in that it is not a dsge model. the difference that is relevant in this context is that the empirical fit of frb / us is allowed to show through more explicitly because the modeling structure of the model is less restrictive than with a dsge model. even so, frb / us has limitations, which it shares with other models of its class, including a relatively primitive financial sector with no theoretically grounded determination of term premiums. of course, it is also advantageous to solicit from several models the implications of a particular macroeconomic phenomenon of interest. for this reason, among others, the staff across the federal reserve system builds and maintains a number of models. - 6third, the general - equilibrium structure of the model is also important : it is helpful to be able to understand, for example, if a hypothetical appreciation of the dollar might have something to do with an increase in equity share values or whether an independent causal force is at work. finally, the new keynesian nature of the model implies that wages and prices are sticky and that markets adjust slowly to their longer - run equilibria. much of the usefulness of the frb / us model stems from its careful modeling of the monetary transmission mechanism and the key role that the expectations of households, workers, firms, and investors play in that mechanism. the monetary policy transmission mechanism is the means through which changes in a central bank ’ s policy instrument affect the economy. in the frb / us model, the usual

federal reserve system : purposes and functions, 9th ed. ( washington : board of governors ). figure 2 : policy rules and economic outcomes – extracted from april 2011 tealbook part b note : “ april tb baseline ” refers to the baseline forecast in the april 2011 tealbook ; “ taylor 1993 ” refers to the taylor policy rule ; “ taylor 1999 ” refers to the taylor ( 1999 ) policy rule ; and “ first difference ” refers to the first ‐ difference rule. the definition for each rule is given in note 17 of the main text. pce is personal consumption expenditures. source : board of governors of the federal reserve system ( 2011 ), report to the fomc on economic conditions and monetary policy — book b : monetary policy : strategies and alternatives [ tealbook b ] ( washington : board of governors, april ), available at https : / / www. federalreserve. gov / monetarypolicy / fomchistorical2011. htm. figure 3 : constrained vs. unconstrained monetary policy – extracted from august 2011 tealbook part b august 2011 tealbook : constrained june 2011 tealbook : constrained august 2011 tealbook : unconstrained source : board of governors of the federal reserve system ( 2011 ), report to the fomc on economic conditions and monetary policy — book b : monetary policy : strategies and alternatives [ tealbook b ] ( washington : board of governors, august ), available at https : / / www. federalreserve. gov / monetarypolicy / fomchistorical2011. htm.