Grounding Large Language Models in DSGE Simulators for Policy Generation and Forecasting

Excerpt

arXiv:2610.01128v1 Announce Type: cross Abstract: Large language models can produce economic policy responses that sound reasonable, but this does not show that their actions are consistent with economic dynamics. We test this by placing an instruction-tuned language model inside six Snowdrop-backed dynamic stochastic general equilibrium (DSGE) simulators. At each turn, the model observes the economy and a change in economic discourse, selects a bounded policy action, and receives the next simul