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First announcements and real economic activity

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  • Clements, Michael P.
  • Beatriz Galvão, Ana

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.

Suggested Citation

  • Clements, Michael P. & Beatriz Galvão, Ana, 2010. "First announcements and real economic activity," European Economic Review, Elsevier, vol. 54(6), pages 803-817, August.
  • Handle: RePEc:eee:eecrev:v:54:y:2010:i:6:p:803-817
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    Cited by:

    1. repec:eee:eneeco:v:72:y:2018:i:c:p:177-187 is not listed on IDEAS
    2. Francisco Castro & Javier J. Pérez & Marta Rodríguez‐Vives, 2013. "Fiscal Data Revisions in Europe," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 45(6), pages 1187-1209, September.
    3. Masolo, Riccardo M. & Paccagnini, Alessia, 2015. "Identifying noise shocks: a VAR with data revisions," LSE Research Online Documents on Economics 86314, London School of Economics and Political Science, LSE Library.
    4. repec:eee:eneeco:v:66:y:2017:i:c:p:337-348 is not listed on IDEAS
    5. Michael P. Clements, 2014. "Anticipating Early Data Revisions to US GDP and the Effects of Releases on Equity Markets," ICMA Centre Discussion Papers in Finance icma-dp2014-06, Henley Business School, Reading University.
    6. David Hendry & Michael P. Clements, 2010. "Forecasting from Mis-specified Models in the Presence of Unanticipated Location Shifts," Economics Series Working Papers 484, University of Oxford, Department of Economics.

    More about this item

    Keywords

    Announcements Real activity Data measurement Revisions;

    JEL classification:

    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection

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