The ECB-Multi Country Model. A semi-structural model for forecasting and policy analysis for the largest euro area countries

Elena Angelini, Nikola Bokan, Matteo Ciccarelli, Magdalena Lalik and Srečko Zimic

No 3119, Working Paper Series from European Central Bank

Abstract: This paper introduces the European Central Bank’s Multi Country model (ECB-MC), a coherent macroeconomic framework designed to support economic forecasting and policy analysis within the Eurosystem. The ECB-MC captures the economic dynamics of the five major economies in the euro area – Germany, France, Italy, Spain, and the Netherlands – which account for more than 80 percent of the euro area total GDP. By incorporating detailed structural features and data-driven insights, the model provides the main reference for the ECB’s staff macroeconomic projections, acting as a disciplined tool for forecasting, enabling scenario, risk and sensitivity analyses, and giving a framework to understand the transmission channels of various economic shocks. The paper offers a detailed account of the structure, the estimation and the model properties, and provides a primer on the potential uses of the ECB-MC in the Eurosystem macroeconomic projections. JEL Classification: C3, C5, E5, E6

Keywords: euro area countries; forecasting; monetary policy; semi-structural model (search for similar items in EconPapers)
Date: 2025-09
Note: 338657
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Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbwps:20253119

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