The paper introduces an approximate dynamic factor model based on the extraction of principal components from a very large number of leading indicators stacked at various lags. The model is designed to produce short-term forecasts that are computed with the EM algorithm implemented with the...

The EU economy and the euro area economy, in particular, have been experiencing a moderate recovery since the third quarter of 2003. A closer look at the nature of the current recovery reveals its fragility and, in some euro-area economies, the continued strong reliance of growth on external...

The objective of this literature review is to determine how the literature can inform policy makers on the choice of policy instruments. Does the empirical and theoretical literature unambiguously support, from an efficiency perspective, the case for liberalization? As a corollary, to what...

This paper analyses three questions related to the EU/EMU integration infrastructure: (i) interrelation between monetary and fiscal integration; (ii) interrelation between monetary integration and closer coordination of macroeconomic policies and (iii) fiscal discipline vs. fiscal solidarity. On...

This Economic Brief reviews the main features of monetary policy frameworks implemented by the major central banks following the collapse of the Bretton Woods system of fixed exchange rates in the early 1970s. It discusses how these frameworks were affected by the academic views prevailing at...

Over 2010-11, the gross household saving rate in Austria declined abruptly to an historical low of 12% of disposable income, despite a marked recovery of output and employment. Prior to that, in 2001-7, the saving rate had been rising steadily to stabilize at a high level of 16% in 2007-9. Such...

This paper uses vector auto-regression (VAR) models and a panel fiscal reaction function (FRF) to simulate debt ratios for fifteen EU Member States according to four regimes which are the Cartesian product of two types of errors (normal or bootstrapped) with two alternative assumptions on the...

This paper studies the impact of a securities transaction tax (STT) on financial trading, stock prices and real economic variables in closed-economy dynamic stochastic general-equilibrium model featuring financial frictions. The model incorporates channels by which 'noise trading' affects real...