Chop the onions, dice the meat (about 1/2 – 1 inch or 1-2 cm), slice the carrots and parsnips (about 1/5 – 2/5 inch or 0.5-1 cm thin), cut the pepper into 8 pieces, and dice the tomato.
In a large saucepan, sauté the onions over medium heat until golden, about 7 minutes.
Take it off the heat, add the paprika and ground caraway seed, and stir.
Return to the heat, add the meat, and stir. Turn the heat to 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 the bay leaf, tomato, and green pepper, stir, and cook for another 5 minutes, stirring occasionally.
Add 16 oz. (about 500 ml) of water, cover, and cook over low heat for about an hour.
Add the carrots and parsnips, stir, and cook for another 20 minutes, covered.
When the meat is almost done, add the potatoes and 16 oz. (about 500 ml) of water. Bring to a boil and cook for another 15 minutes, covered.
If you like dumplings: roughly mix 2 eggs, 16-18 tbsp (120-130 g) all-purpose flour, and 1/2 tsp salt (you don’t need to process the dough too much). Remove the lid, add 8 oz. (250 ml) of water to your goulash, wet a teaspoon, and drop 1/2 – 1 teaspoon portions of dough into the lightly boiling goulash. Cook for another 2-3 minutes.