"Improving GDP Measurement: A Forecast Combination Perspective"

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.

Information

Paper Number: 11-028

Paper Year: 2011

Authors:

S. Aruoba
Francis Diebold
Jeremy Nalewaik
Frank Schorfheide
Dongho Song