Christiano L. J., Eichenbaum M. S., Trabandt M.(2018). On DSGE Models[J]. Journal of Economic Perspectives,32(3):113-140.
Abstract: The outcome of any important macroeconomic policy change is the net effect of forces operating on different parts of the economy. A central challenge facing policymakers is how to assess the relative strength of those forces. Economists have a range of tools that can be used to make such assessments. Dynamic stochastic general equilibrium (DSGE) models are the leading tool for making such assessments in an open and transparent manner. To be concrete, suppose we are interested in understanding the effects of a systematic change in policy, like switching from inflation targeting to price-level targeting. The most compelling strategy would be to do randomized control trials on actual economies, but that course of action is not available to us. So what are the alternatives? It is certainly useful to study historical episodes in which such a similar policy switch occurred or to use reduced-form time series methods, but these approaches also have obvious limitations. In the historical approach, the fact that no two episodes are exactly the same always raises questions about the relevance of a past episode for the current situation. In the case of reduced-form methods, it is not always clear which parameters should be changed and which should be kept constant across policy options. Inevitably, assessing the effects of a systematic policy change has to involve the use of a model.