Finance Discipline Group
UTS Business School
University of Technology, Sydney

Working Paper Series

The Effects of Inflation and the Business Cycle on Revisions of Macroeconomic Data
Author(s): Chris Bajada
Date of publication: January 2001
Working paper number: 110
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 paper is to provide the first known examination of these effects and to identify an optimal policy strategy to ensure the highest quality of data collection. This paper finds the optimal strategy to be a policy of low inflationary economic growth with an inflation target between 0 and 5%.
Paper: Download (Format: PDF, Size: 2,289 Kb)
Comments: Published as: Bajada, C., 2002, "The Effects of Inflation and the Business Cycle on Revisions of Macroeconomic Data", Australian Economic Review, 35(3), 276-286.
Known citations:

Jacobs, J. and Sturm, J, 2004. "Do Ifo Indicators Help Explain Revisions in German Industrial Production?", CESifo Working Paper Number: 1205, CESifo Group Munich.

Lee, K., Olekalns, N., Shields, K. and Wang, Z., 2012, "The Australian Real-Time Datbase: An Overview and an Illustration of its Use in Business Cycle Analysis", Economic Record, 88(283), 495-516.