The numbers guiding policymakers and experts are subject to revisions as "advance" estimates are based on incomplete source data. Until recently, most economists thought that data revisions were likely to be small and inconsequential. But the size of data revisions over the past few years have made a convincing case that data revisions may be large and have important implications for both policies (as exemplified by role of revisions in the debate about shifts in the Beveridge curve) and the variables we choose to measure output growth (GDP vs. GDI).
According to the BEA, the average revision in either direction is 0.5 points between the first and second estimate, 0.6 between the first and third, and 1.3 between the first and last. That’s a huge amount of error.
According to the BEA, the average revision in either direction is 0.5 points between the first and second estimate, 0.6 between the first and third, and 1.3 between the first and last. That’s a huge amount of error.
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