In novels and stories and other creative works, words spoken by a character are normally set off from the narrative with quotation marks, and the speaker is identified in the run of text by tags like “she said.” This is not only Chicago style—it’s an old convention that continues to dominate literature today. To help readers keep track of who’s speaking without the constant repetition of tags, it’s also traditional to start a new paragraph when the speaker changes.
Here’s an example from Ji-li Jiang’s memoir, Red Scarf Girl (New York: Harper Trophy, 1997):
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