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Archive » March 2018 » Ecb interest rates: a predictive model

Ecb interest rates: a predictive model

Vincenzo D’Apice, Francesco Masala, Pierluigi Morelli
March 2018 - n. 3
Jel codes: E43, E52, E58

Euro area economic recovery is starting to create the conditions for reducing monetary stimulus. We create a predictive model in order to forecast the probability of Ecb moving interest rates, based on consumers’ confidence index, expected inflation and an index of systemics stress in the Euro area. The model shows that the probability of an Ecb interest rate rise has gone up to 36% while it was only 4% at the beginning of 2017.

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