Improving GDP Measurement: A Measurement-Error Perspective

S. Boraǧan Aruoba; Francis X. Diebold; Jeremy Nalewaik; Frank Schorfheide; Dongho Song

doi:10.3386/w18954

Improving GDP Measurement: A Measurement-Error Perspective

S. Boraǧan Aruoba, Francis X. Diebold, Jeremy Nalewaik, Frank Schorfheide & Dongho Song

Working Paper 18954

DOI 10.3386/w18954

Issue Date April 2013

We provide a new and superior measure of U.S. GDP, obtained by applying optimal signal-extraction techniques to the (noisy) expenditure-side and income-side estimates. Its properties - particularly as regards serial correlation - differ markedly from those of the standard expenditure-side measure and lead to substantially-revised views regarding the properties of GDP.

For helpful comments we thank Bob Chirinko, Don Harding, Greg Mankiw, Adrian Pagan, John Roberts, Matt Shapiro, Chris Sims, Mark Watson, Justin Wolfers and Simon van Norden. For research support we thank the National Science Foundation and the Real-Time Data Research Center at the Federal Reserve Bank of Philadelphia. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
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Improving GDP Measurement: A Measurement-Error Perspective

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