Now-Casting and the Real-time Data Flow

Banbura, Marta; Giannone, Domenico; Modugno, Michele; Reichlin, Lucrezia

Now-Casting and the Real-time Data Flow

ECB Working Paper No. 1564

55 Pages Posted: 12 Aug 2013

See all articles by Marta Banbura

Domenico Giannone

Federal Reserve Banks - Federal Reserve Bank of New York; Centre for Economic Policy Research (CEPR)

Michele Modugno

Board of Governors of the Federal Reserve System

London Business School; Université Libre de Bruxelles (ULB) - European Center for Advanced Research in Economics and Statistics (ECARES); Centre for Economic Policy Research (CEPR); European Central Bank (ECB)

There are 2 versions of this paper

Date Written: July 2013

Abstract

The term now-casting is a contraction for now and forecasting and has been used for a long-time in meteorology and recently also in economics. In this paper we survey recent developments in economic now-casting with special focus on those models that formalize key features of how market participants and policy makers read macroeconomic data releases in real time, which involves: monitoring many data, forming expectations about them and revising the assessment on the state of the economy whenever realizations diverge sizeably from those expectations. (Prepared for G. Elliott and A. Timmermann, eds., Handbook of Economic Forecasting, Volume 2, Elsevier-North Holland)

Keywords: Macroeconomic News, Macroeconomic Forecasting, Real-Time Data, Mixed Frequency, State Space Models

JEL Classification: E32, E37, C01, C33, C53

Suggested Citation: Suggested Citation

Banbura, Marta and Giannone, Domenico and Modugno, Michele and Reichlin, Lucrezia, Now-Casting and the Real-time Data Flow (July 2013). ECB Working Paper No. 1564. Available at SSRN: https://ssrn.com/abstract=2284274