Commentary: Using Models for Monetary Policy Analysis
by Carl E. Walsh
University of California, Santa Cruz
Modern policy analysis makes extensive use of dynamic stochastic general equilibrium (DSGE) models. These models differ significantly from earlier generations of large-scale econometric models. I review what I see as major progress in the ability of economists to conduct model-based policy analysis. This progress has come through the evolution in the types of models being used and in a refinement of the types of questions asked of these models.
JEL Codes: E17, E52.
(PDF, 12 pages 237 kb)