Abstract

After the “Great Recession” in the 1930th，the macroeconomics was on a par with the microeconomics. The research field of macroeconomics included economic growth and economic fluctuation. Keynes said that in the long term we would all dye，which directed many economics focus on the economic fluctuation in a short run.

Meanwhile the economitrics became a workhorse for the economic fluctuation research. Before the 1970th，the Simultaneous equation models were the main tool for the analysis and forecast in the macroeconomics，but the challenge form the reality and thoery in the 1970th，the economitrics followed three directions. One direction was the time series models which gave up constrains of theory and focused on the dynamic dependence in and between the variables in the term of “let the data speak”. The second direction was improving and devising the Simultaneous equation models and made them more reality and fit into the theory. The last direction was building the DSGE model，which based on the new classical growth model. Compared with time series models and Simultaneous equation models，the DSGE models had the strong theoretical foundation which based on the new classical growth model and the assumption of rationality. Complementary to the analysis of long-term growth of the neoclassical growth model，the DSGE model contains the short-term uncertainty and can analyse short-term fluctuations. In addition to that，the same as the neo-classical growth model，the DSGE model was based on the overlap generation model or in an indefinite community model，which in turn，can study the dynamic characteristics of the economy.

On the background talked above，the thesis on the monetary policy has great practical significancy. The literature focus on the subthesis on how to build the monetary policy，which trend the policy will direct，what rule the central bank followed，few literature investigate how to evaluate the monetary policy and which policy will be fitter than other in DSGE framework. Based on the reality of China，this paper simulate some questions used the DSGE model and analysis the economy effect of some special monetary policy.

One contribution of this paper is that this paper investigate many literature on the DSGE modeling and classified them into 5 kinds：the first literature were the theoretical origin of DSGE modeling，which tell the read in the historical perspective. The second kind of literature was talked about the reason why the economy will fluctuate which was the main feature of DSGE models. The third were about the application of the DSGE models in many countries’ central bank. The forth were about the development of how estimate the DSGE models. The last kind briefly introduced the domestic research on this topic.

Another contribution of this paper is to introduce the process of how to use the DSGE models-from the setup of participant’s behavior to buildup of the nonlinear differential system，from the solaving the steady state to the model linearliziton. Addition to that，this paper introduce how to match the model and data and also suggestion how to estimate the models.

Keywords：DSGE Model；Policy Simulation；Monetary Policy Effect