A case study: the revisions and forecasts of Euro Area quarterly GDP

In general, rational economic agents trade off the cost of waiting for the statistical agencies disseminate the final results of the relevant surveys before making a decision, on the one hand, and of making use of some model based predictions. Thus, from the viewpoint of agents, predictions and preliminary results from surveys often compete against each other. Comparing the loss attached to predictions, on the one hand, and to possible preliminary estimate from incomplete samples, on the other, provides a broad guidance in deciding if and when statistical agencies should release preliminary and final estimates. In this paper, the case of the dissemination of figures on quarterly GDP in the Euro Area is examined. The main conclusion is that the so called “flash estimates” actually provide valuable information to the users, while intermediate releases, published before three months from the end of the reference quarter can be substituted by model based estimation without any loss of accuracy.