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| Format: | Preprint |
| Published: |
2025
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| Subjects: | |
| Online Access: | https://arxiv.org/abs/2502.06528 |
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Table of Contents:
- This paper integrates the damped harmonic oscillator into DSGE models to better capture delayed economic adjustments. By introducing a damping coefficient, I model economic recoveries as under-damped, critically damped, or over-damped processes. Numerical simulations illustrate how different damping levels affect recovery speed and stability. This approach enhances DSGE models' realism, offering insights into historical economic crises and improving macroeconomic forecasting.