On DSGE Models

Lawrence Christiano, Martin Eichenbaum and Mathias Trabandt

No 24811, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The outcome of any important macroeconomic policy change is the net effect of forces operating on different parts of the economy. A central challenge facing policy makers is how to assess the relative strength of those forces. Dynamic Stochastic General Equilibrium (DSGE) models are the leading framework that macroeconomists have for dealing with this challenge in an open and transparent manner. This paper reviews the state of DSGE models before the financial crisis and how DSGE modelers responded to the crisis and its aftermath. In addition, we discuss the role of DSGE models in the policy process.

JEL-codes: E0 E3 (search for similar items in EconPapers)
Date: 2018-07
New Economics Papers: this item is included in nep-cba, nep-dge, nep-hpe and nep-mac
Note: EFG ME
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (52)

Published as Lawrence J. Christiano & Martin S. Eichenbaum & Mathias Trabandt, 2018. "On DSGE Models," Journal of Economic Perspectives, vol 32(3), pages 113-140.

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