Sinposis

This textbook introduces graduate and upper undergraduate students to Dynamic Stochastic General Equilibrium (DSGE) models. As DSGE models become integral in advanced coursework, this book serves as an invaluable guide, explaining the complexities with a methodological red thread across its five chapters. Starting with the stochastic dynamic models of the Real Business Cycle (RBC) and progressing through the field of New Keynesian Macroeconomics (NKE), it employs DSGE models to shed light on the dynamic nature of economic systems.The book presents the Blanchard-Kahn methodology for theoretical solutions, discussing its usefulness and limitations as models evolve in complexity. The book goes on to explain the shift from analytical to numerical solutions, showcasing the DYNARE software and providing coding insights. Unique to this volume is a chapter on difference equations, equipping students with essential mathematical tools, and a concluding exploration of a medium-sized NewKeynesian Economics model.