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Nowcasting in Real Time Using Popularity Priors

Monokroussos, George (2015): Nowcasting in Real Time Using Popularity Priors.

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Abstract

This paper proposes a Bayesian nowcasting approach that utilizes information coming both from large real-time data sets and from priors constructed using internet search popularity measures. Exploiting rich information sets has been shown to deliver significant gains in nowcasting contexts, whereas popularity priors can lead to better nowcasts in the face of model and data uncertainty in real time, challenges which can be particularly relevant during turning points. It is shown, for a period centered on the latest recession in the United States, that this approach has the potential to deliver particularly good real-time nowcasts of GDP growth.

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