Scope and role of economic research
The primary focus of the economic research activities of the European Commission, through its Directorate General for Economic and Financial Affairs (DG ECFIN) is to support policy making. It does this by:
- developing research tools and analysing data
- using tools and analysis to help determine priorities and guide and support policy making in the European Commission in general
- internalising economic knowledge, analysis and tools from the outside and, where appropriate, engaging in debate and discussion, all of which helps in identifying new priorities
- disseminating and communicating research findings related to the Commission's economic policy priorities, both internally and externally
Research focuses on the functioning of economic and monetary union (EMU).
Research issues range from financial stability in the context of enlargement to the question of how structural reforms undertaken as part of the Lisbon Strategy contribute to macroeconomic performance.
Research also looks at economic implications of ageing populations and covers global economic issues.
The Directorate General for Economic and Financial Affairs (DG ECFIN) uses two main macroeconomic models for macroeconomic policy analysis and research: the QUEST model and the Global Multicountry (GM) model.
Output gap calculation method
Potential output and the output gap are key metrics for policy makers to assess the cyclical position and productive capacity of the EU and Euro Area economies.
With the technical support of the Directorate General for Economic and Financial Affairs (DG ECFIN), the EU’s Output Gap Working Group (OGWG) has been responsible, over the last 20 years, for the development of the EU’s Commonly Agreed Methodology for producing potential growth and output gap estimates (EUCAM).