Econometric Analysis and Simulation of the DSGE Model for the Ecuadorian Economy: An Empirical Study with Macroeconomic Policy Proposals

This study carries out an econometric analysis of the behavior of the Ecuadorian economy during the period 2000–2024, using 94–100 quarterly observations taken from the Central Bank of Ecuador, using vector autoregressive models such as: VAR, VECM, among others. Additionally, a cointegration analysis and simulation of dynamic stochastic general equilibrium (DSGE) models are carried out. The research shows the dynamic interrelationships between six macroeconomic variables: GDP, gross fixed capital formation (GFCF), employment, wages, consumption, and non-financial assets (NFA). The econometric results reveal that investment (GFCF) constitutes the main engine of economic growth, with a multiplier effect of 1.65 and evidence of bidirectional causality with GDP. A causal chain was identified: investment → growth → employment → consumption, where the GFCF explains 5.5% of the variability of GDP over five periods. The VAR model with four lags shows high explanatory power with an R2 value >0.73 in all variables, while the impulse response analysis indicates that non-financial assets generate more pronounced impacts than investment shocks. The calibrated DSGE model shows strengths in the consumption adjustment with an error of 6.86% and GDP-investment correlation with an error of 5.99%. The impulse response functions show that Ecuador is a small open economy, highly sensitive to external shocks, particularly oil, with effects that gradually fade over 20–30 periods.