Empirical Economics

, Volume 42, Issue 1, pp 95–119 | Cite as

Nowcasting norwegian GDP: the role of asset prices in a small open economy

Open Access


This article finds that asset prices on Oslo Stock Exchange is the single most important block of data to improve estimates of current quarter GDP in Norway. We use an approximate dynamic factor model that is able to handle new information as it is released, thus the marginal impact on mean square nowcasting error can be studied for a large number of variables. We use a panel of 148 non-synchronous variables. The high informational content in asset prices is explained by reference to the small size of companies on Oslo Stock Exchange and the small and open nature of the Norwegian economy.


Forecasting Financial markets Monetary policy Factor models Small open economy 

JEL Classification

C33 C53 E52 G14 



We gratefully acknowledge Domenico Giannone for making Matlab codes used by Giannone et al. (2008) available to us. We will also thank the editor, the referees, Hilde C. Bjørnland, Michele Modugno, Ragnar Nymoen, Terje Skjerpen, Shaun Vahey as well as conference participants at The 28 International Symposium on Forecasting in Nice, The 23rd Annual Congress of the European Economic Association in Milan and seminar participants at The 2007 Nowcasting Seminar in Norges Bank and University of Oslo for helpful comments. Views expressed are those of the authors and do not necessarily reflect the views of Norges Bank and The World Bank.

Open Access

This article is distributed under the terms of the Creative Commons Attribution Noncommercial License which permits any noncommercial use, distribution, and reproduction in any medium, provided the original author(s) and source are credited.

Supplementary material

181_2010_429_MOESM1_ESM.pdf (31 kb)
ESM 1 (PDF 32 kb)


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Copyright information

© The Author(s) 2010

Authors and Affiliations

  1. 1.Economics DepartmentNorges BankOsloNorway
  2. 2.University of OsloOsloNorway
  3. 3.The World Bank Treasury, Quantitative StrategiesWashingtonUSA
  4. 4.Research DepartmentNorges BankOsloNorway

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