Dynamic factor models and dynamic stochastic general equilibrium (DSGE) models are used in macroeconomics to understand how different economic factors interact. Boivin and Giannoni combined these two models to create a data-rich DSGE model. By comparing this model with a standard one using U.S. economic data, they found that the factors identified by the data-rich DSGE model closely match the empirical factors. This means that the data-rich DSGE model can help predict a wide range of economic indicators beyond just a few traditional variables.