Danilo Cascaldi-Garcia, Federal Reserve Board
Project Description/Abstract
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.
Co-Authors
Thiago R.T. Ferreira, Federal Reserve Board
Domenico Giannone, Amazon.com
Michele Modugno, Federal Reserve Board