The small open hypothesis suggests that small open economies are crucially affected by foreign economic activity. This study compares the predictive content of traditional financial variables and foreign economic activity for forecasting GDP growth in seven European small open economies during...

Recently introduced measure for Economic Policy Uncertainty (EPU) seems to have a role to play in forecasting out-of-sample values for the future real economic activity both for the euro area and the UK economies in the monthly data from 1997-2016. Inclusion of EPU measures either for the US, UK...