This model can be used as a forecasting tool (as an input to, or cross check of, the central staff forecasts which are predominantly judgemental – and much more detailed – in nature). It can also be used in "optimal policy mode".
Small and medium-sized enterprises, the backbone of the euro area economy, have greatly benefited: their access to financing has significantly improved and their borrowing costs have dropped by around 40 basis points since March 2016 and around 180 basis points since May 2014. By the end of 2016, the recovery was clearly firming and further broadening across sectors and countries.