Tracking Growth in the Euro Area Subject to a Dimensionality Problem

We investigate which variables have supported growth in the euro area over last 30 years. This is a challenging task due to dimensionality problems: large set of potential determinants, limited data, and prospect that some could be non-stationary. assemble 35 real, financial, monetary, institutional for nine original countries covering period between 1990Q1 2016Q4. Using Weighted-Average Least Squares method, we gather clues about select. quantify impact various determinants short long runs. Our main finding positive robust role EU integration on long-term all sample. An improvement competitiveness matters overall run, as well decline sovereign systemic stress. Debt GDP negatively influences periphery, but only run. Property equity prices significant whereas loans non-financial corporations positively affect core area. increase global also supports JEL Classification: C23, E40, F33, F43