Matteo Barigozzi, Claudio Lissona, Matteo Luciani
arXiv 8 May 2025 · Econometrics · publishedEuropean Economic Review (2024) · 3 citations (OpenAlex)
arXiv:2505.05536 · PDF · DOI · OpenAlex · Extracted main text
We measure the Euro Area (EA) output gap and potential output using a non-stationary dynamic factor model estimated on a large dataset of macroeconomic and financial variables. From 2012 to 2024, we estimate that the EA economy was tighter than policy institutions estimate, suggesting that the slow EA growth results from a potential output issue, not a business cycle issue. Moreover, we find that a decline in trend inflation, not slack in the economy, kept core inflation below 2% before the pandemic and that demand forces account for at least 30% of the post-pandemic increase in core inflation.
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The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.
| Reference | Intensity | Mentions | Sections | Main text | |
|---|---|---|---|---|---|
| 1 | Morley, J., D. Rodríguez-Palenzuela, Y. Sun, and B. Wong (2023) Estimating the euro area output gap using multivariate information and addressing the COVID-19 pandemic | 0.855 | 8 | 6 | 62% |
| 2 | Canova, F (2025) FAQ: How do I estimate the output gap? | 0.843 | 4 | 3 | 75% |
| 3 | Barigozzi, M. and M. Luciani (2023) Measuring the Output Gap using Large Datasets self | 0.843 | 5 | 4 | 60% |
| 4 | Stock, J. H. and M. W. Watson (2025) Recovering from COVID | 0.843 | 5 | 3 | 60% |
| 5 | Ascari, G., P. Bonomolo, M. Hoeberichts, and R. Trezzi (2023) The euro area great inflation surge | 0.843 | 3 | 3 | 100% |
| 6 | Bergholt, D., F. Canova, F. Furlanetto, N. Maffei-Faccioli, and P. U… (2025) What drives the recent surge in inflation? the historical decomposition roller coaster | 0.843 | 3 | 3 | 100% |
| 7 | Ciccarelli, M. and C. Osbat (2017) Low inflation in the euro area: Causes and consequences | 0.843 | 3 | 3 | 100% |
| 8 | Corsello, F., S. Neri, and A. Tagliabracci (2021) Anchored or de-anchored? that is the question | 0.843 | 3 | 3 | 100% |
| 9 | Giannone, D. and G. Primiceri (2024) The drivers of post-pandemic inflation | 0.843 | 3 | 3 | 100% |
| 10 | Cette, G., J. Fernald, and B. Mojon (2016) The pre-Great Recession slowdown in productivity | 0.794 | 6 | 3 | 50% |
Showing the top 10 of 238 scored citations.
arXiv econ.EM papers that cite this one, ranked by how heavily they lean on it.
| Citing paper | Intensity | Mentions | Sections | |
|---|---|---|---|---|
| 1 | Robust Tests for Factor-Augmented Regressions with an Application to the Novel EA-MD-QD Dataset | 0.511 | 2 | 1 |