Working Paper: NBER ID: w17421
Authors: S. Boragan Aruoba; Francis X. Diebold; Jeremy Nalewaik; Frank Schorfheide; Dongho Song
Abstract: 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.
Keywords: GDP Measurement; Forecast Combination; Economic Growth
JEL Codes: E01; E32
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| GDPE and GDPI (E20) | GDPC (O49) |
| GDPE (D58) | True GDP (E20) |
| GDPI (E20) | True GDP (E20) |
| GDPE and GDPI errors (C82) | GDPC (O49) |