Resumen de High-growth recoveries, inventories and the great moderation

Máximo Camacho, Gabriel Pérez-Quirós, Hugo Rodríguez Mendizábal

• We develop a dynamic factor model to compute short term forecasts of the Spanish GDP growth in real time. With this model, we compute a business cycle index which works well as an indicator of the business cycle conditions in Spain. To examine its real time forecasting accuracy, we use real-time data vintages from 2008.02 through 2009.01. We conclude that the model exhibits good forecasting performance in anticipating the recent and sudden downturn.