Date of Award
Bachelor of Arts
Revisions to macroeconomic variables are a significant part of the process by which researchers, the general public, and the government get information about the state of the United States' economy. They are also substantial: this can have large implications for forecasting, macroeconomic research, business decisions, and monetary and fiscal policy. In this paper, I examine the cyclicality of various aggregate variables in U.S.data, and determine that of the major NIPA variables analyzed, only consumption andreal imports revisions display a large degree of cyclicality. I also examine the rationalityof the same set of variables under different definitions of the final value, and determine that most, though not all, of the examined variables are rational. Finally, I engage intests of practical rationalityby examining whether or not one can generate a better forecast for final release values of a variable than the initial release by incorporating information about the observed prior mean revision, and determine that incorporating this information into a model does not result in an improved forecast of final release values.
Hall, Jason, "Rationality, revisions, and real-time data" (2019). Honors Theses. 1394.