Running simple DSGE model in Dynare

Dynare is a quite sophisticated software for economic simulations. It is mainly used for estimations of Dynamic Stochastic General Equilibrium Models (DSGE models). DSGE models are considered the state-of-the-art of economic simulations and predictions and they are used by plenty of central banks and ministries of finances all over the world.

You can find a lot of articles about DSGE models on the internet. Most of them are really sophisticated, however, they are usually written for people with good knowledge of mathematical optimization and RBC models theory. I would like to write this article as Dynare tutorial for people with limited knowledge of both economic models and mathematical optimization.