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Macroeconomic Research Guide · DSGE with Dynare

Which DSGE workflow fits your research?

A DSGE paper starts from the question, not the model. Run a worked Dynare example, prepare your own data for estimation, or answer a few questions, and follow the path to the model, solution method and checks your paper needs.

9 Dynare guides9 worked examples with real outputDynare 6 · Octave / MATLAB

Choose an example

Nine models solved, estimated or simulated in Dynare. Each one leads to a different route; the numbers are Dynare's own output.

Dynare guides

Nine routes to a finished paper

Each guide takes one model through the Dynare file, the solution checks, the results and the text for the paper, with the .mod file, real Dynare output and figures.

How the tool decides. The route follows from what the model is for. To explain a mechanism, the model needs only the frictions the mechanism requires: no nominal rigidities (RBC), sticky prices (New Keynesian), and an exchange rate and imported goods when the economy is open. To estimate, identification comes first; the size of the model follows from the number of observables, which must not exceed the number of shocks (otherwise the likelihood is singular). Three observables or fewer fit a small model; four or more call for a medium-scale model with capital, habits and adjustment costs. To design policy, the model is solved under commitment, discretion and optimised simple rules and compared by a loss function. When nonlinearity is the point, an occasionally binding constraint calls for OccBin, and risk, precautionary behaviour or welfare for a second- or third-order solution. On every route, the steady state must solve and the Blanchard–Kahn conditions must hold (as many explosive eigenvalues as forward-looking variables) before any result can be read. In upload mode the tool prepares and checks the data in your browser; the model is solved and estimated in Dynare.