A law issued to allocate reconstruction grants following the 2009 "Aquilano" earthquake has resulted in a large and unanticipated discontinuity across municipalities with comparable damages. Using diff-in-diff analysis we estimate the "local spending" and the "local tax" multipliers -- according...

In this paper we investigate whether accounting for non-pervasive shocks improves the forecast of a factor model. We compare four models on a large panel of US quarterly data: factor models, factor models estimated on selected variables, Bayesian shrinkage, and factor models together with...

In this paper I review the literature on Large-Dimensional Dynamic Factor Models for real-time applications. I first present the Dynamic Factor model, the implications of using large-dimensional databases, and the challenges of real-time applications. Then, I discuss how the literature has...