ECB Press – “Policy analysis with big data”

The recent financial crisis, and the euro area sovereign debt crisis that followed, were characterised by periods of increased heterogeneity, market fragmentation and sudden turns in economic activity. This often made it difficult for economic policymakers to understand and assess in real time the underlying forces driving economic behaviour. Both traditional statistical datasets and our models proved at times inadequate to support the decision-making process, reflecting long time lags, linear assumptions and the absence of more granular information.