Eurozone GDP Forecasting With Microdata : The Role of Conditional Conservatism

This paper focuses on the ability of aggregate income to forecast GDP growth in the Eurozone and, particularly, on the role that special items play in propitiating it by incorporating conditional conservatism. We contribute to the previous literature by discussing the ability of aggregate micro data to forecast real GDP growth in a major economic area other than the US. Moreover, as the Eurozone can be considered an economic region predominantly of civil law, we show evidence in a context where conditional conservatism is expected to be less important. The results support the previous evidence found in the US but tempered by the smaller effect of conditional conservatism on Eurozone microdata