DSGE models revolutionize economic forecasting with impressive accuracy and policy insights.
DSGE models are used to predict economic trends and analyze policies. The researchers reviewed the forecasting accuracy of a specific model and compared it to other forecasts. They found that adding more information from surveys improved the model's predictions. They also looked at how to forecast when interest rates are at their lowest and analyzed past predictions of the Great Recession, finding that a model with financial factors performed well.