Incorporating Damped Harmonic Oscillator in DSGE Models
Abstract
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.
Cite
@article{arxiv.2502.06528,
title = {Incorporating Damped Harmonic Oscillator in DSGE Models},
author = {Wei Chun Hsu},
journal= {arXiv preprint arXiv:2502.06528},
year = {2025}
}
Comments
In the original version, several citations were based on fragmented personal notes and unpublished drafts, leading to inaccurate or misattributed references. This revised version updates both the reference list and the corresponding in-text citations to correctly reflect the literature that informed the paper. I apologize for the oversight