Two often-divergent U.S. GDP estimates are available, a widely-used expenditure-side version GDPE, and a much less widely-used income-side version GDPI . We propose and explore a “forecast combination” approach to combining them. We then put the theory to work, producing a superior combined estimate of GDP growth for the U.S., GDPC. We compare GDPC to GDPE and GDPI , with particular attention to behavior over the business cycle. We discuss several variations and extensions.
First draft : August 2011
Paper
NBER Working Paper 17421 [September 2011]
Federal Reserve Bank of Philadelphia Working Paper [September 2011]
Most Recent Working Paper (may not be identical to the published version)