Chop onions, dice meat (about 1/2 - 1 inch or 1-2 cm), slice carrots and parsnips (about 1/5 - 2/5 inch or 0,5-1 cm thin), cut pepper in 8 pieces and dice tomato.
In a large saucepan saute onions over medium heat until golden, about 7 minutes.
Take off the heat, add paprika and ground caraway seed and stir.
Back on the heat, add meat and stir. Turn the heat high and brown on each side, until the meat starts to sweat, for about 6-7 minutes. Stir occasionally.
Season with salt and pepper, add bay leaf, tomato and green pepper, stir and cook for another 5 minutes, stirring occasionally.
Add 16 oz (about 500 ml) water, cover and cook over low heat for about an hour.
Add carrots and parsnips, stir and cook for another 20 minutes, covered.
When the meat is almost done, add potatoes and 16 oz. (about 500 ml) water. Bring to a boil and cook for another 15 minutes, covered.
If you like dumplings: mix 2 eggs, 16-18 tbsp (120-130 g) all purpose flour and 1/2 tsp salt roughly (you don't need to process the dough too much). Take off the lid, add 8 oz. (250 ml) water to your goulash, wet a teaspoon and immerse 1/2 - 1 teaspoon portions of dough in the lightly boiling goulash. Cook for another 2-3 minutes.