Back To Basics: Data Revisions
Source: Banco de Portugal
With few exceptions, most economic data undergo revisions. Although frequently neglected, data revisions may have implications, not only for economic analysis, but also for policy decisions, as revisions may alter current assessment and forecasts of economic developments. In this paper, the author reassesses data revisions analysis and its impact on forecasting, presenting an encompassing and unified perspective on this subject. For this purpose, the authors build a real-time database for Portuguese exports and imports of goods. He presents a broad set of the measures typically used to gauge revisions and add to this discussion by clarifying the relations between revisions to different types of series.