2014 Volume 44 Issue 1 Pages 159-187
This paper critically reviews roles of dynamics stochastic general equilibrium (DSGE) models in macroeconometrics, introducing econometric categorizations of DSGE models made by Geweke (2010): strong, weak, and minimal econometric interpretations. As an application of the minimal interpretation, this paper introduces the Bayesian Monte Carlo exercise conducted by Kano and Nason (2014) for investigating business cycle implications of consumption habits as a propagation mechanism of monetary policy shocks.