Abstract
The reliability of BEA’s estimates, as measured by the magnitude and pattern of revisions, is highly important to economic policy-making and business decisions. We find evidence that the revisions are partially predicable using contemporaneously available information for the current quarterly estimates of GDP. Information about national income is found to significantly supplement the information found in the final current quarterly estimates of GDP in explaining the revisions to the latest-available estimates of GDP. However, there is little evidence of the predictability of revisions in GDI or national income. Finally, both the advance and final current quarterly estimates are found to do a reliable job of measuring GDP and GDI around cyclical peaks, but a less reliable job around cyclical troughs, the declines preceding the troughs are overstated and the upturns after the troughs are understated.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
References
Croushore D (1993) Introducing: the survey of professional forecasters. Federal Reserve Bank of Philadelphia. Bus Rev (November/December 1993):3–13.
Dean ER, Harper MJ, Otto PF (1995) Improvements to the quarterly productivity measures. Month Labor Rev 118 (October 1995):27–32.
Dotsey M (1998) The predictive content of the interest rate term spread for future economic growth. Federal Reserve Bank of Richmond Econ Quart 84 (Summer 1998):31–51.
Dynan KE, Elmendorf DW (2001) Do provisional estimates of output miss economic turning points? Board of Governors of the federal reserve system. Finance and Economics Discussion Series, 2001–63. November 2001.
RC Fair RJ Shiller (1990) ArticleTitleComparing information in forecasts from econometric models Am Econ Rev 80 IssueID3 375–390
Fixler DJ, Grimm BT (2002) Reliability of GDP and related NIPA estimates. Surv Curr Bus 82(January 2002):9–27.
Fixler DJ, Nalewaik JJ (2005) News, noise, and the estimates of the ‘true’ state of the economy. www.bea.gov/bea/working_papers.htm.
Grimm BT, Parker RP (1998) Reliability of the quarterly and annual estimates of GDP and gross domestic income. Surv Curr Bus 78(December 1998):12–21.
G Jaszi (1965) The quarterly national income and product accounts of the United States: 1942–62 S Goldberg P Deane (Eds) Short-term national accounts and long-term economic growth. Studies in Income and Wealth Bowes & Bowes, for the International Association for Research in Income and Wealth London 100–187
NG Mankiw M Shapiro (1986) ArticleTitleNews and noise: an analysis of GNP revisions Surv Curr Bus 66 20–25
P Rathjens RP Robins (1995) ArticleTitleDo government agencies use public data?: the case of GNP Rev Econ Stat 77 IssueID1 170–172 Occurrence Handle10.2307/2110002
Weale M (1992) Estimation of data measured with error and subject to linear restrictions. J Appl Economet 7(April–June 1992):167–174.
Young AH (1974) Reliability of the quarterly national income and product accounts of the Unites States. Bureau of Economic Analysis Staff Paper, no. 23. U.S. Government Printing Office, Washington, DC, July 1974.
Young AH (1987) Evaluation of the GNP estimates. Surv Curr Bus 67(August 1987):18–42.
Author information
Authors and Affiliations
Corresponding author
Additional information
An earlier and somewhat expanded version of this paper, “Revisions, Rationality, and Turning Points in GDP,” was presented at the session “Tracking the Turning Points in the Economy,” AEA meetings January 3–5 2003, Washington DC. It is available in the “working papers” section of BEA’s web site, www.bea.gov
Rights and permissions
About this article
Cite this article
Fixler, D., Grimm, B. GDP Estimates: Rationality Tests and Turning Point Performance. J Prod Anal 25, 213–229 (2006). https://doi.org/10.1007/s11123-006-7640-x
Issue Date:
DOI: https://doi.org/10.1007/s11123-006-7640-x