No. 1059 - Investment dynamics in the euro area: drivers, composition and cross-country differences

Questioni di Economia e Finanza (Occasional papers)
by Tiziano Ropele and Giordano Zevi
September 2026
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This paper presents the results of an empirical analysis of investment developments in the euro area and its four largest economies over the period 1996-2025. The analysis combines descriptive evidence and econometric estimates, distinguishing between cyclical factors (such as demand, confidence, and financial conditions), structural factors (such as the composition of capital), and country-specific factors.

Investment contractions are found to be synchronised across euro-area countries, reflecting the role of common shocks, whereas recoveries are more heterogeneous across economies. Economic activity is the main driver of investment, although credit conditions also exert a significant influence. Business confidence and economic policy uncertainty play an important role at turning points in the investment cycle. Over the period considered, there has been a gradual reallocation of investment towards intangible assets.

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  1. 17 September 2026
    No. 1059 - Investment dynamics in the euro area: drivers, composition and cross-country differences
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