Aggregate financial conditions indices (FCIs) are constructed to fulfil two aims: (i) The FCIs should resemble non-model-based composite indices in that their composition is adequately invariant for concatenation during regular updates; (ii) the concatenated FCIs should outperform financial...

To date, only annual information on economic activity is published for the 16 German states. In this paper, we calculate quarterly regional GDP estimates for the period between 1995 to 2021, thereby improving the regional database for Germany. The new data set will regularly be updated when...

Unemployment is notoriously difficult to predict. In previous studies, once country and year fixed effects are added to panel estimates, few variables predict changes in unemployment rates. Using panel data for 29 European countries collected by the European Commission over 444 months between...

This paper compares within-sample and out-of-sample fit of a DSGE model with rational expectations to a model with adaptive learning. The Galí, Smets and Wouters model is the chosen laboratory using quarterly real-time euro area data vintages, covering 2001Q1-2019Q4. The adaptive learning model...

We investigate the predictive power of several leading indicators in order to forecast industrial production in Germany. In addition, we compare their predictive performance with variables from two competing categories, namely macroeconomic and financial variables. The predictive power within...

Using a new survey of firms' inflation expectations in France, we provide novel evidence about the measurement and formation of inflation expectations on the part of firms. First, French firms report inflation expectations with a smaller, but still positive, bias than households and display less...

This documentation concisely describes the dynamic stochastic general-equilibrium model that the ifo Institute currently uses for simulations and business-cycle analysis. The model consists of three countries and contains a wide range of rigidities. The model is regularly estimated by quarterly...

The Omicron wave of the coronavirus has impacted economies worldwide, resulting in a bleak winter. Although restrictions on economic and public life have been less severe than at the beginning of 2021 in many places-mainly due to the progress of vaccination campaigns-and there are prospects of...

To date, only annual information on economic activity is published for the 16 German states. In this paper, we calculate quarterly regional GDP estimates for the period between 1995 to 2020, thereby improving the regional database in Germany. The new data set will regularly be updated when...

The German economy is an important economic driver in the Euro-area in terms of gross domestic product, labour force and international integration. We provide a state of the art estimate of the German output gap between 1995 and 2021 and present a nowcasting scheme that accurately predicts the...

Since most macroeconomic data are revised after the initial release both researchers and policy-makers have no choice rather than recognising and understanding the revisions. This paper analyses revisions to the fiscal data in the euro area, also by contrasting them with the 'better-understood'...

Using new survey data on quantitative growth expectations of firms in Germany, we show that firms resort to local information when forming expectations about aggregate growth. Firms extrapolate from the economic situation in their county, industry growth and their individual business situation....

The monthly ifo Business Survey is the basis for numerous economic indicators, such as the ifo Business Climate Index Germany. Moreover, the anonymized micro data can be used for a wide range of research projects. In order to obtain robust results, the panel of survey participants must be large...

The war in Ukraine slows the global recovery. This article briefly presents the IMF’s growth forecasts for 2022 and 2023. In addition to addressing the immediate challenges of the war and the pandemic, it also highlights the need for continued, focused longer-term economic policies,...

We develop a novel multinomial logistic model to detect and forecast concurrent recessions across multi-countries. The key advantage of our proposed framework is that we can detect recessions across countries using the additional informational content from the cross-country panel feature of the...

We propose an event-study research design to identify the nature and propagation of large unusual shocks in DSGE models and apply it to study the macroeconomic effects of the Covid shock. The initial outbreak is represented as the onset of a new shock process where the shock loads on wedges...

We examine several measures of uncertainty to make five points. First, equity market traders and executives at nonfinancial firms have shared similar assessments about one-year-ahead uncertainty since the pandemic struck. Both the one-year VIX and our survey-based measure of firm-level...

We assess the predictive ability of 15 economic uncertainty measures in a real-time out-of-sample forecasting exercise for the quantiles of The Conference Board's coincident economic index and its components (industrial production, employment, personal income, and manufacturing and trade sales)....

This paper documents the existence of electoral cycles in GDP growth forecasts released by governments. In a theoretical model of political selection, we show that governments release overly optimistic GDP growth forecasts ahead of elections to increase the reelection probability. The bias...

Dynamic factor models (DFMs), which assume the existence of a small number of unobserved underlying factors common to a large number of variables, are very popular among empirical macroeconomists. Factors can be extracted using either nonparametric principal components or parametric Kalman...

The availability of copious amounts of data produced by the increasing datification of our society is nowadays deemed an opportunity to produce timely and convenient statistical information. This paper shows the building of economic sentiment indexes from the texts of the most read economic...

In the monthly ifo Business Survey around 9,000 German companies answer questions about their current business situation, expectations and plans for the near future as well as on other business variables. This paper provides an overview of all regular questions (monthly, quarterly, bi-annually,...

Why does the short-term slope of the yield curve predict recessions? We explore the economic forces underlying Treasury yields' fluctuations and highlight the roles of a tight monetary policy stance and expectations of lower inflation in predicting downturns. While the monetary policy stance is...

The Business Leaders' Pulse is a new online survey conducted each month. It is designed to provide timely and flexible input into the Bank of Canada's monetary policy decision making while also creating a platform to analyze business conditions and uncertainty. Since May 2021, the Bank has been...