Improving GDP Measurement: A Forecast Combination Perspective

(with Francis X. Diebold, Jeremy J. Nalewaik, Frank Schorfheide and Dongho Song)

Published in Causality, Prediction, and Specification Analysis: Recent Advances and Future Directions: Essays in Honor of Halbert L. White Jr (X. Chen and N. Swanson eds.), 2013, Springer, 1-26.

Two often-divergent U.S. GDP estimates are available, a widely-used expenditure-side version GDPE, and a much less widely-used income-side version GDPI . We propose and explore a “forecast combination” approach to combining them. We then put the theory to work, producing a superior combined estimate of GDP growth for the U.S., GDPC. We compare GDPC to GDPE and GDPI , with particular attention to behavior over the business cycle. We discuss several variations and extensions.

First draft : August 2011


NBER Working Paper 17421 [September 2011]

Federal Reserve Bank of Philadelphia Working Paper [September 2011]

Most Recent Working Paper (may not be identical to the published version)

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