Forecasting EU Economic Activity Using Financial Condition Indexes
quantf research Working Paper Series: WP06/2014
13 Pages Posted: 2 Jun 2014
Date Written: June 1, 2014
This paper investigates the performance of Financial Condition Indexes (FCIs) in forecasting four key macroeconomic variables of EU economies. A wide range of carefully selected financial indicators include Rates and Spreads, Stock Market Indicators and Macroeconomic Quantities. The results provide evidence that FCIs are particularly useful in forecasting GDP growth, Consumption growth, Industrial Production growth and the Unemployment Rate.
Keywords: Financial Conditions, Forecasting
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