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A State‐Space Approach to Australian Gross Domestic Product Measurement
Author(s) -
Rees Daniel M.,
Lancaster David,
Finlay Richard
Publication year - 2015
Publication title -
australian economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.308
H-Index - 29
eISSN - 1467-8462
pISSN - 0004-9018
DOI - 10.1111/1467-8462.12106
Subject(s) - gross domestic product , economics , volatility (finance) , quarter (canadian coin) , gross domestic income , headline , econometrics , space (punctuation) , product (mathematics) , real gross domestic product , national income and product accounts , national accounts , agricultural economics , macroeconomics , public economics , geography , gross income , mathematics , business , computer science , advertising , geometry , archaeology , tax reform , state income tax , operating system
We use state‐space methods to construct new estimates of Australian gross domestic product growth from the published national accounts estimates of expenditure, income and production. Across a range of specifications, our measures are substantially less volatile than headline domestic product. We conclude that much of the quarter‐to‐quarter volatility in Australian domestic product growth reflects measurement error, rather than true shifts in the level of economic activity .