Nowcasting economic activity in European regions using a mixed-frequency dynamic factor model

Luca Barbaglia; Lorenzo Frattarolo; Niko Hauzenberger; Dominik Hirschbühl; Florian Huber; Luca Onorante; Michael Pfarrhofer; Luca Tiozzo Pezzoli

doi:10.1016/j.ijforecast.2025.09.006

Nowcasting economic activity in European regions using a mixed-frequency dynamic factor model

Luca Barbaglia^*, Lorenzo Frattarolo, Niko Hauzenberger, Dominik Hirschbühl, Florian Huber, Luca Onorante, Michael Pfarrhofer, Luca Tiozzo Pezzoli

^*Corresponding author for this work

Economics

Research output: Contribution to journal › Article › peer-review

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Abstract

Timely and accurate information about regional economic conditions can be essential for planning, implementing, and evaluating locally targeted economic policies. However, European regional accounts for output are published at an annual frequency with a two-year delay. To obtain robust and more timely measures in a computationally efficient manner, we propose a mixed-frequency dynamic factor model that accounts for national information to produce high-frequency estimates and reliable nowcasts of regional gross value added (GVA) in more than 150 regions across 13 European countries.

Original language	English
Number of pages	16
Journal	International Journal of Forecasting
Early online date	7 Oct 2025
DOIs	https://doi.org/10.1016/j.ijforecast.2025.09.006
Publication status	E-pub ahead of print - 7 Oct 2025

Keywords

Euro area
Factor models
Mixed-frequency
Nowcasting
Regional data

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Barbaglia-etal-2025-Nowcasting-economic-activity-in-European-regionsProof, 4.35 MBLicence: CC BY 4.0

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title = "Nowcasting economic activity in European regions using a mixed-frequency dynamic factor model",

abstract = "Timely and accurate information about regional economic conditions can be essential for planning, implementing, and evaluating locally targeted economic policies. However, European regional accounts for output are published at an annual frequency with a two-year delay. To obtain robust and more timely measures in a computationally efficient manner, we propose a mixed-frequency dynamic factor model that accounts for national information to produce high-frequency estimates and reliable nowcasts of regional gross value added (GVA) in more than 150 regions across 13 European countries.",

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doi = "10.1016/j.ijforecast.2025.09.006",

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T1 - Nowcasting economic activity in European regions using a mixed-frequency dynamic factor model

AU - Barbaglia, Luca

AU - Frattarolo, Lorenzo

AU - Hauzenberger, Niko

AU - Hirschbühl, Dominik

AU - Huber, Florian

AU - Onorante, Luca

AU - Pfarrhofer, Michael

AU - Tiozzo Pezzoli, Luca

PY - 2025/10/7

Y1 - 2025/10/7

N2 - Timely and accurate information about regional economic conditions can be essential for planning, implementing, and evaluating locally targeted economic policies. However, European regional accounts for output are published at an annual frequency with a two-year delay. To obtain robust and more timely measures in a computationally efficient manner, we propose a mixed-frequency dynamic factor model that accounts for national information to produce high-frequency estimates and reliable nowcasts of regional gross value added (GVA) in more than 150 regions across 13 European countries.

AB - Timely and accurate information about regional economic conditions can be essential for planning, implementing, and evaluating locally targeted economic policies. However, European regional accounts for output are published at an annual frequency with a two-year delay. To obtain robust and more timely measures in a computationally efficient manner, we propose a mixed-frequency dynamic factor model that accounts for national information to produce high-frequency estimates and reliable nowcasts of regional gross value added (GVA) in more than 150 regions across 13 European countries.

KW - Euro area

KW - Factor models

KW - Mixed-frequency

KW - Nowcasting

KW - Regional data

UR - https://github.com/lucabarbaglia/RegionalNowcasting_replication_package_IJoF

U2 - 10.1016/j.ijforecast.2025.09.006

DO - 10.1016/j.ijforecast.2025.09.006

M3 - Article

SN - 0169-2070

JO - International Journal of Forecasting

JF - International Journal of Forecasting

ER -

Nowcasting economic activity in European regions using a mixed-frequency dynamic factor model

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Keywords

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