In 2006 all ECB publications feature a motif taken from the €5 banknote. This paper can be downloaded without charge from

Abstract not found

In 2007 all ECB publications feature a motif taken from the €20 banknote. This paper can be downloaded without charge from

disaggregate forecasts or combining disaggregate information to forecast an aggregate

We explore whether forecasting an aggregate variable using information on its disaggregate components can improve the prediction mean squared error over forecasting the disaggregates and aggregating those forecasts, or using only aggregate information in forecasting the aggregate. An implication of a theory of prediction is that the first should outperform the alternative methods to forecasting the aggregate in population. However, forecast models are based on sample information. The data generation process and the forecast model selected might differ. We show how changes in collinearity between regressors affect the bias-variance trade-off in model selection and how the criterion used to select variables in the forecasting model affects forecast accuracy. We investigate why forecasting the aggregate using information on its disaggregate components improves forecast accuracy of the aggregate forecast of Euro area inflation in some situations, but not in others. The empirical evidence on Euro-zone inflation forecasts suggests that more information can help, more so by including macroeconomic variables than disaggregate components.

Abstract not found

In 2009 all ECB publications feature a motif taken from the €200 banknote. This paper can be downloaded without charge from

time series

Food price pass-through in the euro area the role of asymmetries and non-linearities by Gianluigi Ferrucci

publications feature a motif taken from the €100 banknote. NOTE: This Working Paper should not be reported as representing the views of the European Central Bank (ECB). The views expressed are those of the authors and do not necessarily reflect those of the ECB. This paper can be downloaded without charge from