The Darkening Euro Area Growth Outlook

We kick off the fall 2023 season in our "Week in Europe" series by discussing the cyclical and longer-term outlook for the Euro Area growth. We present positive and negative factors affecting growth dynamics and discuss mechanisms through which recent negative supply shocks might give rise to long-term scarring implications for Euro Area GDP. The paper we mention in the podcast is: "The Scars of Supply Shocks: Monetary Policy Implications", by Luca Fornaro and Martin Wolf. Working paper version (no paywall) https://crei.cat/wp-content/uploads/2023/04/TSS-2.pdf Publishes version: https://www.sciencedirect.com/science/article/pii/S0304393223000417