Abstract:
Although national accounts data provide the
most comprehensive overview of economic activity,
preliminary estimates are subject to
much revision before they are regarded as reliable
indicators. Oddly enough, the market
acts on the preliminary estimates as though
they were final and complete. Even though
there exists a considerable international literature
on the statistical properties of these revisions,
little attention has been devoted to the
effects of inflation and the business cycle on the
size and direction of these early revisions. The
aim of this article is to provide the first known
examination of these effects. The findings in
this article suggest that preliminary estimates
are more reliable in periods of low inflationary
economic growth.
