DSGE model underestimates growth, reduced-form VARs benefit from economic prior.
The study looked at different ways to predict the future of the Spanish economy after the financial crisis. They combined a big structural model with simpler forecasting methods and found that the structural model didn't predict growth accurately. However, the simpler methods did better when they used information from the structural model. Overall, adding information from the structural model to the simpler methods didn't make a big difference in how well they could predict the future of the economy.