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Differences in Early GDP Component Estimates Between Recession and Expansion

Author

Listed:
  • Tara M. Sinclair

    (Department of Economics/Institute for International Economic Policy, George Washington University)

  • H.O. Stekler

    (Department of Economics, George Washington University)

Abstract

In this paper we examine the quality of the initial estimates of the components of both real and nominal U.S. GDP. We introduce a number of new statistics for measuring the magnitude of changes in the components from the initial estimates available one month after the end of the quarter to the estimates available 3 months after the end of the quarter. We further specifically investigate the potential role of changes in the state of the economy for these changes. Our analysis shows that the early data generally reflected the composition of the changes in GDP that was observed in the later data. Thus, under most circumstances, an analyst could use the early data to obtain a realistic picture of what had happened in the economy in the previous quarter. However, the differences in the composition of the vectors of the two vintages were larger during recessions than in expansions. Unfortunately, it is in those periods when accurate information is most vital for forecasting.

Suggested Citation

  • Tara M. Sinclair & H.O. Stekler, 2011. "Differences in Early GDP Component Estimates Between Recession and Expansion," Working Papers 2011-05, The George Washington University, Institute for International Economic Policy.
    • Handle: RePEc:gwi:wpaper:2011-05
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    References listed on IDEAS

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    Cited by:

    1. Mr. Manik L. Shrestha & Mr. Marco Marini, 2013. "Quarterly GDP Revisions in G-20 Countries: Evidence from the 2008 Financial Crisis," IMF Working Papers 2013/060, International Monetary Fund.
    2. Jürgen Bierbaumer-Polly & Sandra Bilek-Steindl & Marcus Scheiblecker, 2015. "Analysis of the Revisions to the Quarterly National Accounts Since the Introduction of Flash Estimates in 2005," WIFO Bulletin, WIFO, vol. 20(2), pages 14-30, February.
    3. Jürgen Bierbaumer-Polly & Sandra Bilek-Steindl & Marcus Scheiblecker, 2014. "Revisionsanalyse der vierteljährlichen Volkswirtschaftlichen Gesamtrechnung seit Einführung der Schnellschätzung im Jahr 2005," WIFO Monatsberichte (monthly reports), WIFO, vol. 87(10), pages 693-710, October.

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    More about this item

    Keywords

    Flash Estimates; Data Revisions; GDP Components; Statistical Tests; Business Cycles;
    All these keywords.

    JEL classification:

    • C82 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Macroeconomic Data; Data Access
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods

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