Teaching dynamic General equilibrium macroeconomics to undergraduates using a spreadsheet

Dynamic Stochastic General Equilibrium (DSGE) models have become the fundamental theoretical framework in current macroeconomic analysis. However, with very few exceptions, they are not taught to undergraduate students, in spite of the fact that they form the core of standard economics graduate programmes. One of the main barriers for teaching DSGE models at an undergraduate level is not theoretical complexity, but rather, computer skills, as these models have to be solved numerically using specific software. In this paper, we propose a method for solving DSGE models using a spreadsheet, with computer software widely known by students: Microsoft Excel. We consider two different alternative approaches to solving DSGE models in Excel. First, the model can be solved using Excel's Solver tool. Second, the model can be linearized and numerically simulated directly in a spread-sheet. We think that these approaches can pave the way for teaching DSGE modelling to students in an undergraduate advanced macroeconomics course by removing the limitations imposed by the requisite computer skills.