The Fog of Numbers

Jordà, Òscar; Kouchekinia, Noah; Merrill, Colton; Sekhposyan, Tatevik

Journal Article

The Fog of Numbers

Abstract: In times of economic turbulence, revisions to GDP data can be sizable, which makes conducting economic policy in real time during a crisis more difficult. A simple model based on Okun’s law can help refine the advance data release of real GDP growth to provide an improved reading of economic activity in real time. Applying this to data from the Great Recession explains some of the massive GDP revisions at that time. This could provide a guide for possible revisions to GDP releases during the current coronavirus crisis.

Keywords: GDP; Covid-19; Okun's law; economic activity;