A System of Rapid Estimates to Improve Real-Time Monitoring of the Economic Situation: The Case of the Euro Area

Abstract

Timely availability of relevant economic information is from the users' point of view a crucial pre-requirement for effective economic and monetary policy and for accurate analysis and reliable forecasting. Unfortunately, official statistics are not always able to meet such needs. For this reason, particularly over the recent past, advanced statistical and econometric techniques have been used to complement the classical production process in order to increase the timeliness of the relevant economic information. Furthermore, official statistics do not necessarily show explicitly relevant phenomena such as the cyclical situation and the location of turning points. In order to fill this gap, indicators have to be built up to extract such relevant signals and to make them available in an easily readable and comprehensible way to all users. This paper gives a general overview of ongoing Eurostat projects, aiming to supply timely information to all users based on transparent and statistically sound methodologies. In particular this paper presents results related to the construction of flash estimates in order to increase the timeliness of official statistics as well as the construction of a timely statistical system for business cycle analysis based on a set of turning points indicators and cyclical estimates. The results obtained so far are very encouraging, especially in terms of the overall quality of the estimates and the statistical robustness of the proposed methods. Nevertheless, some improvements, particularly related to the precision of flash estimates, are needed, especially under an uncertain economic situation and regime changes.