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Stub!!?? Certainly more material could be added, but I don't favor long articles in which the main points get lost. I can't see how this could be considered a stub under the assessment scale. -- Rinconsoleao ( talk) 12:47, 1 July 2008 (UTC)
1. Is there any difference between the terms DSGE (dynamic stochastic general equilibrium) and DGE (dynamic general equilibrium) or are the terms perfectly identical? 2. I have a book in front of me saying that New Classical Economics mark I, i.e. the Rational Expectations School, used "dynamic general equilibrium" models. This article says that DSGE started only with the RBC theory, i.e. in 1982. Is the book wrong? Visitor. —Preceding unsigned comment added by 195.98.14.140 ( talk) 21:10, 5 April 2010 (UTC)
3. Newbie question: Is it too soon to add to the "Controversies" section Paul Romer's critique of misuses of DGSE and policy inferences therefrom ("The Trouble with Macroeconomics" https://paulromer.net/wp-content/uploads/2016/09/WP-Trouble.pdf)? Or wait for it to be published in The American Economist? CambridgeOrbital ( talk) 19:37, 25 September 2016 (UTC)
Especially with all the work on adding financial frictions to DSGE models, maybe it is time for a section on "recent advances". Topics discussed could include:
Rinconsoleao ( talk) 08:34, 20 July 2010 (UTC)
In the section on the Structure of DSGE models in the second paragraph it says: ". They are also stochastic, taking into account the fact that the economy is affected by random shocks such as technological change, fluctuations in the price of oil, or errors in macroeconomic policy-making".
I would suggest to replace the term "errors in macroeconomic policy-making" with the more value-neutral formulation of "changes in macroeconomic policy".
I am new around here, so I just wanted to suggest this before making the edit myself. Julius Fries ( talk) 18:04, 6 April 2011 (UTC)
Dr. Mourougane has reviewed this Wikipedia page, and provided us with the following comments to improve its quality:
In the introduction, it would be useful to state that DSGE are now widely used in central banks for policy simulation analysis. In terms of forecasting performance, it is not clear whether the outperform standard macro-economic models or not.
It should be also states that models are either calibrated or estimated, using bayesien procedures.
The sentence "The model is intended as an alternative to the Area-Wide Model (AWM), a more traditional empirical forecasting model which the ECB has been using for several years." is not correct anymore. The ECB has now developed a new AWM which is a DSGE-based. ( https://www.ecb.europa.eu/pub/pdf/scpwps/ecbwp944.pdf?383d445af1f1b505066c82ad2340852d)
In the disadvantages of DSGE, some modellers often argue that their simulations outcomes only reflect their underlying calibration assumption. In particular, results only depend on the value of key parameter (eg the share of non-ricardian households in the total).
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ExpertIdeasBot ( talk) 18:25, 27 June 2016 (UTC)
Dr. Casares has reviewed this Wikipedia page, and provided us with the following comments to improve its quality:
In the second sentence i would have said: "The DSGE methodology provides short-run fluctuations of aggregate economic variables to explain the determinants of business cycles. Typically, the analysis looks at the effects of stabilizing policies, market imperfections, and idiosyncratic shocks. The models are derived from microeconomic principles with rational expations, and assume market rigidities of the Keynesian tradition"
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ExpertIdeasBot ( talk) 18:54, 27 June 2016 (UTC)
Dr. Fehr has reviewed this Wikipedia page, and provided us with the following comments to improve its quality:
I think it is a very good article. Hardly anything to improve.
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ExpertIdeasBot ( talk) 08:24, 28 June 2016 (UTC)
Dr. Schorfheide has reviewed this Wikipedia page, and provided us with the following comments to improve its quality:
1) By now the abbreviatins SDGE and DGE are rarely used. There was some discussion in the early 2000s about how to call these models, but by now the majority of the profession adopted DSGE
2) The statement that most central banks rely on traditional macroeconometric models for short-term forecasting is inaccurate. It is true that there are few institutions that rely on DSGE models for short-term forecasting, but the suite of models used for short term forecasting is much larger than "traditional macroeconometric models." It includes VARs, dynamic factor models, mixed frequency models, etc...
3) Rotemberg and Woodford (1997) were not the first to introduce the New Keynesian framework. The general setup evolved over a decade or more. They created an econometric framework that allowed them to do empirical work with NK DSGE models. However, that particular framework, was not adopted by the subsequent literature. It is certainly an influential paper but "first to introduce" is not correct.
3a) Intellectually, Chris Sims was very influential in transforming the RBC agenda into a research agenda that develops models useable for the analysis of monetary policy. While the model in http://www.nber.org/papers/w4761 was never really adopted, the paper sets out an important agenda. Importantly, it argues for likelihood based estimation of DSGE models at a time when the majority of the profession was calibrating these models. Likelihood-based estimation is important for tracking data and forecasting.
4) Frank Smets (and Raf Wouters) developed the Smets and Wouters model after Smets moved to the ECB, but at the time it was not an official model at the ECB. In fact, the Riksbank adopted an open economy version of the Smets-Wouters model much earlier than the ECB officially started to use its New Area Wide model (which is built on the SW model).
5) Intellectually, the SW model builds on the model developed by Christiano, Eichenbaum, and Evans (2005, JPE) (Don't let the publication date fool you). It augmented the CEE model by additional shocks, so that it could be estimated on and a fairly large (7) set of macroeconomic aggregates. The key contribution of SW was to combine an expanded CEE model with the emerging Bayesian estimation methods for DSGE models to demonstrate that a DSGE model could produce reasonable macroeconomic forecasts, which made it attractive to central banks.
6) I would not call Mankiw a "founder" of New Keynesian *** DSGE modeling ***.
7) BEQM was not a DSGE model and is retired by now. So, I would not add it to the list of references. You might want to reference the Riksbank model and the NAWM of the ECB. Also, the FRB New York recently put its DSGE model on the web http://libertystreeteconomics.newyorkfed.org/2015/12/the-frbny-dsge-model-meets-julia.html#.V3PDUnrGr38 Marco Del Negro and I have written a lot on DSGE model forecasting. Links to some liberty street blog pieces are available here: https://sites.sas.upenn.edu/schorf/pages/blogs-etc We also have a handbook chapter on DSGE model forecasting:
https://sites.sas.upenn.edu/schorf/publications/dsge-model-based-forecasting
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ExpertIdeasBot ( talk) 19:46, 1 July 2016 (UTC)
Dr. Benchimol has reviewed this Wikipedia page, and provided us with the following comments to improve its quality:
Some perspectives are missing:
- DSGE models in other fields (such as biology or physics for instance. - Some schools are missing: sunspot, news shocks etc... - How these models are used in central banks ? and for which objectives ?
This article should be enriched by baseline and popular models currently used in the literature including a timeline: - 1998: Kollmann, Robert, 1998. "US trade balance dynamics: the role of fiscal policy and productivity shocks and of financial market linkages," Journal of International Money and Finance, Elsevier, vol. 17(4), pages 637-669, August. - 2005: Lawrence J. Christiano & Martin Eichenbaum & Charles L. Evans, 2005. "Nominal Rigidities and the Dynamic Effects of a Shock to Monetary Policy," Journal of Political Economy, University of Chicago Press, vol. 113(1), pages 1-45, February. - 2003: Frank Smets & Raf Wouters, 2003. "An Estimated Dynamic Stochastic General Equilibrium Model of the Euro Area," Journal of the European Economic Association, MIT Press, vol. 1(5), pages 1123-1175, 09. - 2007: Frank Smets & Rafael Wouters, 2007. "Shocks and Frictions in US Business Cycles: A Bayesian DSGE Approach," American Economic Review, American Economic Association, vol. 97(3), pages 586-606, June. - 2012: Jordi Galí & Frank Smets & Rafael Wouters, 2012. "Slow Recoveries: A Structural Interpretation," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 44, pages 9-30, December.
Last but not least a large part of this article is focused on the disadvantage of DSGE models and controversy. I think it could be useful to highlight advantages of DSGE model.
DSGE models are also widly used by central banks for analysing as well as forecasting the economy. This should also be highlighted. New DSGE models include original features such as financial, labor market and banking frictions. Such models, as well as nonlinear DSGE models, allow new understandings of economic stylized facts.
References Hashmat Khan & John Tsoukalas, 2012. The Quantitative Importance of News Shocks in Estimated DSGE Models, Journal of Money, Credit and Banking, Blackwell Publishing, vol. 44(8), pages 1535-1561, December.
Slanicay Martin, 2014. Some Notes on Historical, Theoretical, and Empirical Background of DSGE Models, Review of Economic Perspectives, De Gruyter Open, vol. 14(2), pages 20, June.
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ExpertIdeasBot ( talk) 16:21, 19 May 2016 (UTC) — Preceding unsigned comment added by I.yeckehzaare ( talk • contribs)
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Greetings, everyone. I suggest a rather major re-write of the text, in two steps: One step is taking care of housekeeping: removing from the “See also” section wikilinks already in the article; wikifying all citations per the relevant templates; and correcting orthographical errors.
The next step would concern, of course, the article’s substance where I’d suggest the following architecture:
A introduction with a short definition, and much shorter text than what we now have. Then, the following sections:
Any comments? Many thanks in advance. - The Gnome ( talk) 12:02, 1 April 2018 (UTC)
I found the following description of the DSGE model microfoundations at the Italian Treasury site. I'd like to add them to the article, would be great if someone reviewed them. Alaexis ¿question? 08:16, 1 January 2019 (UTC)
From the text in this article, one gets the impression that the criticism from Lucas makes this kind of modeling unsatisfactory due to the decision-making having to be preset. I find that this is not necessary true and that a more flexible model having the ability to balance and reset the decision-making criteria during the simulation process is not only possible but most desirable so that the program is more able to be realistic. Macrocompassion ( talk) 09:48, 27 October 2020 (UTC)
The article starts by saying what DSGE is used for, but not what it is. It needs to start with a brief definition in the first sentence. I don't know enough about the subject to define it, so must leave it to others. Something like
DSGE is a macroeconomic method. Earlier models were essentially static; DSGE is a way of modelling the economy that is dynamic, taking into account demand, supply, and the monetary policy equation using statistical methods. DSGE is often employed by monetary and fiscal authorities for policy analysis ...
but better. Best wishes, Pol098 ( talk) 11:16, 30 May 2022 (UTC)