The authors present an update of the economic forecasts generated by the New York Fed's dynamic stochastic general equilibrium (DSGE) model.| Liberty Street Economics
This post discusses the evolution of the short-run natural rate of interest, or short-run r*, over the past year and a half according to the New York Fed DSGE model, and the implications of this evolution for inflation and output projections. We show that, from the model’s perspective, short-run r* has increased notably over the past year, to some extent outpacing the large increase in the policy rate. One implication of these findings is that the drag on the economy from recent monetary po...| Liberty Street Economics
This post uses the New York Fed DSGE model to simulate how interest rates, output, and inflation would have performed had the Fed followed an average inflation targeting (AIT)-type reaction function since the second quarter of 2021, when inflation began to rise—instead of keeping the federal funds rate at the zero lower bound until March 2022, and then raising it aggressively thereafter. The authors show that actual policy was more accommodative in 2021 than implied by the AIT reaction func...| Liberty Street Economics
An update of the economic forecasts generated by the Federal Reserve Bank of New York’s dynamic stochastic general equilibrium (DSGE) model.| Liberty Street Economics
The DSGE model forecast is not an official New York Fed forecast, but only an input to the Research staff’s overall forecasting process. The New York Fed DSGE Model is a product of the Applied Macroeconomics and Econometrics Center (AMEC).| www.newyorkfed.org
Marco Del Negro is an economic research advisor in Macroeconomic and Monetary Studies. He is also the director of the Applied Macroeconomics and Econometrics Center (AMEC), a CEPR Research Fellow, coeditor of the Journal of Applied Econometrics, and chair of the Research Group’s Technology Strategy Committee. Mr. Del Negro's research focuses on the use of general equilibrium models in forecasting and policy analysis. Before joining the Bank, he was a research economist and associate policy ...| www.newyorkfed.org
Fields of interest| www.newyorkfed.org