We advance the proposition that dynamic stochastic general equilibrium (DSGE) models should not only be estimated and evaluated with full information methods.These require that the complete system of equations be specified properly. Some limited information analysis, which focuses upon specific...

DSGE models have become a widely used tool for policymakers. This paper takes the global identification theory used for structural vectorautoregressions, and applies it to dynamic stochastic general equilibrium (DSGE) models. We use this modified theory to check whether a DSGE model structure...

In this paper we review the evolution of macroeconomic modelling in a policy environment that took placeover the past sixty years. We identify and characterise four generations of macro models. Particular attention is paid to the fourth generation – dynamic stochastic general equilibrium...

For Afghanistan, the dual prospect of declining donor support and high ongoing security spending over the medium term keeps the government budget tight. This paper uses a general equilibrium model to capture the security-development tradeoff facing the government in its effort to rehabilitate...

The effect of oil prices on inflation has varied greatly in the last 50 years. Rising oil prices in the 1970s and early 1980s were associated with high and rising inflation. In the late 1980s and 1990s, however, the inflationary effect moderated. Although the experience of the energy crisis in...

We analyze the economic dynamics in a basic New Keynesian model adjusted for imperfect, heterogeneous knowledge and adaptive learning. The policy, represented by a forward-looking Taylor rule, is driven by the central bank's own internal forecasts, whereas the core economic dynamics are driven...