Article ID Journal Published Year Pages File Type
5067372 European Economic Review 2010 15 Pages PDF
Abstract
The recent literature suggests that first announcements of real output growth in the US have predictive power for the future course of the economy while the actual value of output growth does not. We show that this need not point to a behavioural relationship, whereby agents respond to perceptions instead of the truth, but may instead simply be a by-product of the data revision process. The revisions to the initial estimates which define the final values of the observations are shown to be key in determining any relationship between first announcements and the future course of the economy.
Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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