Journal Article

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


  • Boysen-Hogrefe
  • J.
Publication Date

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


JEL Classification
C53, E37, E41

Key Words

  • Euro area
  • Euroraum
  • narrow money
  • Predicting recessions
  • Probit
  • real M1