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Journal Article

A note on predicting recessions in the euro area using real M1

Authors

  • Boysen-Hogrefe
  • J.

Publication Date

JEL Classification

C53 E37 E41

Key Words

Euro area

Euroraum

narrow money

Predicting recessions

Probit

real M1

Real M1 is a renowned leading indicator used to forecast real economic activity. This note provides evidence that real M1 is also a suitable recession indicator that gave a clear and early signal for the Great Recession as long as changes in money demand are controlled for.

Kiel Institute Expert

  • Prof. Dr. Jens Boysen-Hogrefe
    Kiel Institute Researcher

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