The role of survey data in nowcasting euro area GDP growth

Abstract:
This paper evaluates the impact of new releases of financial, real activity and survey data on the nowcasting of euro area GDP growth. We show that financial data are only essential for improving nowcasting in the first two months of a nowcast quarter. This contrasts with survey and real data, which are indispensable components throughout the entire nowcasting exercise.

When treating variables as if they were all published at the same time and without any time lag, financial series lose all their significance, while survey data remain important. This evidence suggests that survey data offer more than just timeliness for the purpose of nowcasting GDP growth. The latter holds true for financial data only when restricting the analysis to the 2008-09 financial crisis.

European Commission: DG Economic and Financial Affairs:European Economy: Economic Papers No.538, December 2014:The role of survey data in nowcasting euro area GDP growth http://ec.europa.eu/economy_finance/publications/economic_paper/2014/ecp538_en.htm

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