Dynamic Stochastic General Equilibrium models have come under fire since the financial crisis. A recent paper by Christiano, Eichenbaum and Trabandt – who provide a defense for DSGE – has generated yet another wave of reactions in the economic blogosphere. We review the most recent contributions on this topic.
Date: December 11, 2017
Topic: European Macroeconomics & Governance
A recent paper by Christiano, Eichenbaum and Trabandt (C.E.T.) on Dynamic Stochastic General Equilibrium Models (DSGEs) has generated quite a reaction in the blogosphere. In the paper, C.E.T. argue that pre-crisis DSGE models had shortcomings that were highlighted by the financial crisis and its aftermath. But over the past 10 years,Read More »