This paper is an applied study about forecasting trend output and the output gap in the Euro area. The need for trend output forecasts is justified by an analysis of the monetary strategy of the European Central Bank. Trend output serves as a direct inflation indicator and helps to determine the...

This paper estimates and forecasts trend output and output gaps for the Euro area. In the monetary strategy of the European Central Bank (ECB), trend output is used to forecast a reference value for money. For this purpose, trend output must be forecasted as well. In this paper, a...

Mixed-data sampling (MIDAS) regressions allow to estimate dynamic equations that explain a low-frequency variable by high-frequency variables and their lags. To account for temporal instabilities in this relationship, this paper discusses an extension to MIDAS with time-varying parameters, which...