Dynamic Stochastic General Equilibrium (DSGE) models are the main tool used in Academia and in Central Banks to evaluate the business cycle for policy and forecasting analyses. Despite the recent advances in improving the fit of DSGE models to the data, the misspecification issue still remains....

In an environment where economic structures break, variances change, distributions shift, conventional policies weaken and past events tend to reoccur, economic agents have to form expectations over different regimes. This makes the regime-switching dynamic stochastic general equilibrium...

Introduction -- Real Business Cycle (RBC) model -- Basic New-Keynesian (NK) model -- New-Keynesian model with wage stickiness -- New-Keynesian model with habit formation and non-Ricardian agents -- New-Keynesian Model with adjustment costs on investment and under-utilization of maximum installed...