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Back to the Present: Learning about the Euro Area through a Now-casting Model

2021; Volume: 2021; Issue: 1312 Linguagem: Inglês

10.17016/ifdp.2021.1313

2767-4509

Danilo Cascaldi-Garcia, Thiago R.T. Ferreira, Domenico Giannone, Michèle Modugno,

Economic Policies and Impacts

We build a model for simultaneously now-casting economic conditions in the euro area and its three largest member countries|Germany, France, and Italy. The model formalizes how market participants and policymakers monitor the euro area by incorporating all market moving indicators in real time. We find that area wide and country-specific data provide informative signals to now-cast the economic conditions in the euro area and member countries. The model provides accurate predictions of economic conditions in real time over a period that covers the past three recessions.