Improving GDP Measurement: A Measurement-Error Perspective
36 Pages Posted: 11 May 2013
Date Written: May 2, 2013
We provide a new and superior measure of U.S. GDP, obtained by applying optimal signal-extraction techniques to the (noisy) expenditure-side and income-side estimates. Its properties -- particularly as regards serial correlation -- differ markedly from those of the standard expenditure-side measure and lead to substantially-revised views regarding the properties of GDP.
Keywords: Income, Output, expenditure, business cycle, expansion, contraction, recession, turning point, state-space model, dynamic factor model, forecast combination
JEL Classification: E01, E32
Suggested Citation: Suggested Citation