The concept of DSGE.
Explanation of Solution
The term DSGE stands for Dynamic Stochastic General Equilibrium. The DSGE is an econometric model that is used to explain economic phenomenon, such as the impact of economic policies, business cycle or
DSGE (Dynamic Stochastic General Equilibrium) model: The DSGE is an econometric model that is used to explain economic phenomenon, such as the impact of economic policies, business cycle, or economic growth and so on, the basis of general equilibrium.
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Chapter 15 Solutions
Macroeconomics (Fourth Edition)
- What is the Consumer Price Index for 2016?arrow_forwarda. Explain briefly what the consumer price index tries to measure?arrow_forwardUsing the data in the table, compare the percentage rates of change in nominal GDP, real GDP, and the GDP Price Index over these three time periods. Note changes in the magnitudes of each. Are there periods when prices grew more rapidly? Are there periods where real output grew more rapidly? Note how these affect the percentage change in nominal GDP. Make specific observations based on the information in the table.arrow_forward
- What is indexing?arrow_forwardWhy might even real GDP be a misleading index of changes in output between 1950 and 2015 in the United States?arrow_forwardIn 2012 the nominal value for household spending on food and beverages was equal to $17593m and in 2021 it was $23888m. Using the most appropriate price index from the list below, calculate the percentage change in real household spending on food and beverages from 2012 to 2021 and answers the questions below. 2012 2021CPI (Food) 961 1057CPI (All groups) 949 1068PPI (Outputs - Food manufacturing) 1031 1171Import price index (food and beverages) 1436 1306 The index I used in my calculation was the? 1. CPI (Food) 2. CPI (All Groups) 3. PPI (Outputs) 4. Import price indexarrow_forward
- In 2012 the nominal value for household spending on food and beverages was equal to $17593m and in 2021 it was $23888m. Using the most appropriate price index from the list below, calculate the percentage change in real household spending on food and beverages from 2012 to 2021 and answers the questions below. 2012 2021CPI (Food) 961 1057CPI (All groups) 949 1068PPI (Outputs - Food manufacturing) 1031 1171Import price index (food and beverages) 1436 1306 The percentage change in real household spending on food and beverages is equal to?arrow_forward... ... Using the data In the table below related to nominal GDP and the chaln-welghted price deflators for gross domestic product (e.g., price Index for GDP), answer the followIng questions: Nominal GDP (in Billions) Chain-weighted Price Deflators (Index) for GDP 2012 = 100 (Base Year) Year 78.1 2001 10,128 10,469 82.6 2004 11,685 84.8 12,422 87.4 13,178 90.1 9007 13,808 92.5 14,291 600 2010 14,527 96.1 2011 15,518 2012 16,163 0 00 101.8 16,768 2014 2015 18,037 104.6 2016 18,754 105.7 2017 19,543 107.8 20,612 21,433 112.3 Instructlons: For parts a, c, d, and e, enter your responses as a percentage rounded to one deClmal place. For part b, round your response to the nearest billion. a. Calculate the percentage change In nominal GDP between 2016 and 2017. b. Calculate real GDP In 2017 at prices of 2016. 24 C. Calculate the percentage change in real GDP between 2016 and 2017. d. What Is the percentage change In nomlnal GDP between 2016 and 2017 attributed to changing prices? e. What Is…arrow_forwardceal-Time Data Analysis Exercise Ise the data in the following table to calculate the GDP deflator for each year (values are in billions of dollars, enter your response rounded to two decimal places - remember to multiply by 100). Source: Federal Reserve Bank of St. Louis (FRED) (research.stlouisfed.org/fred2/). Year Nominal GDP Real GDP GDP Deflator 2016 $18,745 $17,731 2017 19,543 18,144 8,688 19.092 2018 20,612 2019 21.433 2020 20,935 18,423 Source: Federal Reserve Bank of St. Louis (FRED) (research.stlouisfed.org/fred2/). Which span of years saw the largest percentage increase in the price level, as measured by change in the GDP deflator? O A. 2019 to 2020 O B. 2018 to 2019 O C. 2016 to 2017 O D. 2017 to 2018arrow_forward
- What is the difference between using a measure of inflation such as the consumer prices index (CPI) and the GDP deflator? Which do you think is the more accurate measure of price changes in an economy?arrow_forwardWhy do you think macroeconomists focus on just a few key statistics when trying to understand the health and trajectory of an economy? Would it be better to try to make use of all possible data?arrow_forwardWhat does the Consumer Price Index (CPI) measure? Be specific about what the categories of goods and services that the CPI tracks and measures.arrow_forward
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