In this paper we review the methodology of forecasting with log-linearised DSGE models using Bayesian methods. We focus … matrix of h-step ahead forecasts. In the empirical analysis, we examine the forecasting performance of the New Area … scope for improving the NAWM’s forecasting performance. For example, the model is not able to explain the moderation in wage …

distribution. As an empirical illustration, we use euro area data and compare the forecasting performance of the New Area …

’s forecasting performance relative to a number of benchmarks, including a Bayesian VAR. We finally consider several applications to … illustrate the potential contributions the NAWM can make to forecasting and policy analysis. JEL Classification: C11, C32, E32, E …

show, providing also a superior forecasting performance relative to other available measures. JEL Classification: C22, E31 …

Forecasting the world economy is a di¢ cult task given the complex interre-lationships within and across countries …, …rst, at ranking various forecasting methods in terms offorecast accuracy and, second, at checking whether methods … forecasting di-rectly aggregate variables (direct approaches) outperform methods based onthe aggregation of country …