Espinoza, Raphael; Fornari, Fabio; Lombardi, Marco J. - European Central Bank - 2009
help predicting euro area GDP. We investigate whether financial variables provide additional predictive power. We use a VAR … selected combinations of financial variables. In-sample analysis shows that shocks to financial variables influence real … adding financial variables yields smaller errors in fore-casting US economic activity, especially at a five- quarter horizon …