“This series examines the Federal Reserve Bank of New York’s dynamic stochastic general equilibrium (FRBNY DSGE) model—a structural model used by Bank researchers to understand the workings of the U.S. economy and provide economic forecasts.The U.S. economy has been in a gradual but slow recovery. Will the future be more of the same? This post presents the current forecasts from the Federal Reserve Bank of New York’s (FRBNY) DSGE model, described in our earlier “Bird’s Eye View” post, and discusses the driving forces behind the forecasts. Find the code used for estimating the model and producing all the charts in this blog series here. (We should reiterate that these are not the official New York Fed staff forecasts, but only an input to the overall forecasting process at the Bank.)  The model predicts that economic growth will continue to be sluggish as the headwinds from the financial crisis dissipate at a very slow pace. In addition, the negative shocks that have buffeted the economy will continue to restrain investment spending and further slow the recovery. These negative shocks have been offset in the past by expansionary monetary policy, but the positive effects of this policy are set to fade. Because of the still relatively weak economy, inflation remains below the Fed’s long-term objective, with the gap between inflation and the objective closing over the forecast horizon.”