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Using DSGE Models: Working Paper 2009-04

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  • Jonathan Huntley
  • Eric Miller

Abstract

This paper is intended to be pedagogical rather than a presentation of original research. We describe a simple dynamic, stochastic general equilibrium (DSGE) model with capital utilization, capital adjustment costs, and a simple Cobb-Douglas technology to illustrate how DSGE models can be used to explain the past and to forecast the future. We identify one method to directly estimate latent variables and parameters in a DSGE model. We then construct estimates of the latent variables and shocks, the latter of which drive observed variations in economic activity. Those latent

Suggested Citation

  • Jonathan Huntley & Eric Miller, 2009. "Using DSGE Models: Working Paper 2009-04," Working Papers 41382, Congressional Budget Office.
    • Handle: RePEc:cbo:wpaper:41382
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    File URL: https://www.cbo.gov/sites/default/files/111th-congress-2009-2010/workingpaper/09-2009-using_dsge_models_0.pdf
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    References listed on IDEAS

    as
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