The number of variables related to long-run economic growth is large compared with the number of countries. Bayesian model averaging is often used to impose parsimony in the cross-country growth regression. The underlying prior is that many of the considered variables need to be excluded from...

This paper examines which measures of nancial conditions are informative about the tailrisks to output growth in the euro area. The Composite Indicator of Systemic Stress (CISS)is more informative than indicators focusing on narrower segments of nancial markets ortheir simple aggregation in the...