Real developments, as measured for example by changes in GDP or Industrial Production (IP) Indices over selected horizons, are typically forecast through a combination of macroeconomic variables, financial variables and confidence indicators. These three sets of variables have been so far typically selected at the aggregate level, . no firm-level information has been regularly employed to forecast business cycle developments. The reason for this is that firm-level shocks should wash out with each other in the aggregate and therefore they should not affect the overall economy. .
