How Useful Are Estimated DSGE Model Forecasts for Central Bankers?

@article{Edge2010HowUA,
  title={How Useful Are Estimated DSGE Model Forecasts for Central Bankers?},
  author={Rochelle M. Edge and Refet Soykan G{\"u}rkaynak},
  journal={Brookings Papers on Economic Activity},
  year={2010},
  volume={2010},
  pages={209 - 244}
}
Dynamic stochastic general equilibrium (DSGE) models are a prominent tool for forecasting at central banks, and the competitive forecasting performance of these models relative to alternatives, including official forecasts, has been documented. When evaluating DSGE models on an absolute basis, however, we find that the benchmark estimated medium-scale DSGE model forecasts inflation and GDP growth very poorly, although statistical and judgmental forecasts do equally poorly. Our finding is the… 
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