Dynamic Stochastic General Equilibrium Models (DSGE): How can this model be effectively used in the markets?
Considering the fact that DSGE models have a very few, if at all, any applications in financial markets, and rarely used by fin geeks as a tool for forecasting and time series analysis. But renewed interests in financial modelling for short-term quant analysis in forecasting market trends may find this model intuitively handy.
Considering the other facts that DSGE models are too often lambasted even in the academic settings, having being termed a flawed model with limited implications, I would be really surprised to know if anyone of you guys in the Wall Street have ever used this technique, or are using it for say, modelling stochastic trends in the short-term?
Thanks.
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