Are Preliminary Estimates Rational? : A Study of the Arbitration Process in the Swedish Quarterly National Accounts

Abstract: This study examines whether preliminary estimates of real growth of GDP and the major user side components in the Swedish quarterly national accounts are unbiased forecasts of revised estimates, and whether available information from the process of reconciling GDP from the production and user side is used efficiently to minimise revisions. Regression analysis is performed to find that preliminary GDP growth estimates are rational forecasts of revised estimates. The results are mixed for the user side components. Preliminary estimates of growth of investments and exports are rational forecasts whereas revisions of growth of government spending could be minimised by more efficiently using information about preliminary estimate values. Moreover, information about the statistical discrepancy between the GDP growth estimates from the production and user side could be used to minimise revisions of growth of consumer spending and imports, but these conclusions are sensitive to the period of volatile economic development 2008-2010.