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Dynamic stochastic general equilibrium modeling (abbreviated as DSGE, or DGE, or sometimes SDGE) is a macroeconomic method which is often employed by monetary and fiscal authorities for policy analysis, explaining historical time-series data, as well as future forecasting purposes. [1]
Computable general equilibrium (CGE) models are a class of economic models that use actual economic data to estimate how an economy might react to changes in policy, technology or other external factors. CGE models are also referred to as AGE (applied general equilibrium) models. A CGE model consists of equations describing model variables and ...
The structural equilibrium model is a matrix-form computable general equilibrium model in new structural economics. [30] [31] This model is an extension of the John von Neumann's general equilibrium model (see Computable general equilibrium for details). Its computation can be performed using the R package GE.
A macroeconomic model is an analytical tool designed to describe the operation of the problems of economy of a country or a region. These models are usually designed to examine the comparative statics and dynamics of aggregate quantities such as the total amount of goods and services produced, total income earned, the level of employment of productive resources, and the level of prices.
The dynamic AD–AS model can be viewed as a simplified version of the more advanced and complex dynamic stochastic general equilibrium (DSGE) models which are state-of-the-art models used by central banks and other organizations to analyze economic fluctuations.
Robert Solow interprets the theorem as showing that, for modelling macroeconomic growth, the dynamic stochastic general equilibrium is no more microfounded than simpler models such as the Solow–Swan model. As long as a macroeconomic growth model assumes an excess demand function satisfying continuity, homogeneity, and Walras's law, it can be ...
In a general equilibrium model with a finite number of commodities, there is always a finite odd number of equilibria, each of which is isolated from every other equilibrium. In models with an infinite number of commodities, and this includes most dynamic models, an equilibrium can be characterized by a bounded sequence of price vectors. [19]
A broad class of models used for economic and social modeling of countries and sectors are the Computable general equilibrium (CGE) model - also called applied general equilibrium models. In the context of time based simulations and policy analysis, see dynamic stochastic general equilibrium models.