Our dynamic stochastic general equilibrium (DSGE) model generates forecasts for key macroeconomic variables and serves as a tool for policy analysis. How is the Model Used?

Dynamic stochastic general equilibrium models are playing an important role in the formulation and communication of monetary policy at many of the world’s central banks.

The March 2025 update of the economic forecasts generated by the Federal Reserve Bank of New York’s dynamic stochastic general equilibrium (DSGE) model.

Dynamic stochastic general equilibrium (DSGE) models use modern macroeconomic theory to explain and predict comovements of aggregate time series over the business cycle and to perform policy analysis.

2024年12月20日 · This post presents an update of the economic forecasts generated by the Federal Reserve Bank of New York’s dynamic stochastic general equilibrium (DSGE) model. We describe very briefly our forecast and its change since December 2024 .

(DSGE) models generally consists of the following steps: Step 1. Derive the rst-order conditions of the model. Step 2. Find the steady state. Step 3. Linearize the system around the steady state. Step 4. Solve the linearized system of equations (i.e. decision rules for jump variables and laws of motion for state variables). We must do Step 1.

Dynamic stochastic general equilibrium (DSGE) models describe the behavior of economic agents solving infinite-horizon intertemporal decision problems in a market economy. You might find these chapters and articles relevant to this topic.

Dynamic Stochastic General Equilibrium (DSGE) models refer to modern macroeconomic theory that is used to explain and predict the co-movements of aggregate time series over the business cycle, as well as to perform policy analysis.

This course, presented by the Institute for Capacity Development, focuses on building, using, and interpreting DSGE models. It aims to familiarize participants with the models and techniques commonly employed by policymakers to analyze monetary and fiscal matters.

Many central banks around the world, including the Swedish central bank, the European Central Bank, the Norwegian central bank, and the Federal Reserve, use these models in formulating monetary policy. In this article, Mike Dotsey discusses the major features of DSGE models and why these models are useful to monetary policymakers.