Randall Bartlett, chief economist at the University of Ottawa’s Institute of Fiscal Studies and Democracy (IFSD), calls StatsCan data the closest thing Canadians have to the “gospel truth.” However, “much of this data is released with a significant time lag relative to other developed countries,” Bartlett said.
StatsCan accepts that it could probably release data faster. But that would bring more revisions, said Jim Tebrake, director general of the macroeconomics branch. StatsCan proposed releasing quarterly GDP earlier, but the core users of its data, including the Finance Department, the Bank of Canada and provincial finance ministries, responded that they preferred to wait rather than deal with constant revisions. Other data series present collection issues.
The IFSD recently began publishing what amounts to the first “nowcast” of Canadian GDP that is readily available for public consumption. Nowcasting is the proliferation of data and advances in economic modelling and computing power prompted some economists to wonder if they really needed to wait on statistics agencies to calculate headline figures such as GDP and employment.
The Bank of Canada has published a fair amount of research and it has an in-house model that it follows, said Josianne Ménard, a spokeswoman. “Nowcasting models are useful for summarizing large amounts of high-frequency data,” Ménard said. “However, it is important to note that they are but one input into a wider set of analyses.” Nowcasting models sometimes fail to adjust for “special factors” or other events that are out of line with the historical readings on which the models are based, she said. The Bank of Canada doesn’t publish its nowcast.
In January 2017, Bartlett and the IFSD introduced @NowcastCanada, which anyone with a Twitter account can follow. Bartlett built a model that mirrors StatsCan’s methodology for tallying quarterly GDP and that also includes some U.S. indicators, such as oil imports. Bartlett said research suggests nowcasting produces better predictions than calculating the consensus view of private-sector analysts. If that is true, imagine how useful a consensus of nowcasts could be? But for now, Canada has but one. “We would welcome others to publish their nowcasts,” said Bartlett. “The more information out there, the merrier.”
Read the full article here: Meet the Economists Trying to Publish Economic Data Faster than StatsCan