Back to the Present: Learning About the Euro Area Through a Now-Casting Model

46 Pages Posted: 14 Jun 2021 Last revised: 19 Jun 2021

See all articles by Danilo Cascaldi-Garcia

Danilo Cascaldi-Garcia

Board of Governors of the Federal Reserve System

Thiago R.T. Ferreira

Board of Governors of the Federal Reserve System

Domenico Giannone

International Monetary Fund (IMF); Centre for Economic Policy Research (CEPR)

Michele Modugno

Board of Governors of the Federal Reserve System

Date Written: March, 2021

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.

JEL Classification: C33, C53, E37

Suggested Citation

Cascaldi-Garcia, Danilo and R.T. Ferreira, Thiago and Giannone, Domenico and Modugno, Michele, Back to the Present: Learning About the Euro Area Through a Now-Casting Model (March, 2021). International Finance Discussion Paper No. 1313, Available at SSRN: https://ssrn.com/abstract=3865429 or http://dx.doi.org/10.17016/IFDP.2021.1313

Danilo Cascaldi-Garcia (Contact Author)

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

Thiago R.T. Ferreira

Board of Governors of the Federal Reserve System

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

Domenico Giannone

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Michele Modugno

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

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