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For immediate release
Contact: Katherine Q. Dibling, senior media advisor, 215-574-4119
Philadelphia, Pa. - The Philadelphia Fed’s Research Department today launched a center that will facilitate collaborative research using the Bank’s real-time data set and its surveys of forecasters.
The Real-Time Data Research Center aims to become a source of knowledge and expertise about real-time macroeconomic data, surveys of macroeconomic forecasts, and macroeconomic modeling. The real-time data set includes macroeconomic data series as they were initially released and the subsequent revisions to these data.
The data set enables researchers, forecasters, and monetary policymakers to look back at the past to observe the data that monetary policymakers were confronted with at the time their decisions about interest rates were made. It provides an alternative to using data that have been revised over time. This is important because data revisions can make dramatic differences in the results of empirical research and also the development of economic forecasting models.
“The recent events in financial markets and the real sector of the economy underscore the importance of providing monetary policymakers with new insights into economic forecasting. Policymaking has become more data and forecast driven and our center will promote research to aid the policymaking process. Collaborative efforts among academic and central bank researchers will be encouraged,” said Loretta J. Mester, research director at the Philadelphia Fed. Mester added, “We are happy that Dean Croushore, who is well-known for his work in real-time data, has agreed to serve as interim director of the center.”
“The Federal Reserve’s ability to make better monetary policy decisions depends on studying past data and how they have been revised. By studying those revisions, we can help policymakers understand how to incorporate data revisions into their decision making,” said interim director Dean Croushore, associate professor of economics and Rigsby Fellow at the University of Richmond and former vice president in the Philadelphia Fed’s Research Department. He added, “But the center goes far beyond the study of data revisions and includes much additional macroeconomic research that is relevant for monetary policy.” Listen to audio of a discussion about the Real-Time Data Research Center.
Variables in the real-time data set include gross domestic product (GDP) and all of its components, key price indexes, and other important macroeconomic indicators, such as nonfarm payroll employment and industrial production.
Philadelphia Fed staff and visiting scholars have already initiated research in a variety of areas, including studies of how monetary policymakers should factor in potential revisions to inflation data, how forecasters can improve forecasting models using new techniques, and why the U.S. savings rate is a misleading measure.
The Federal Reserve Bank of Philadelphia helps formulate and implement monetary policy, supervises banks and bank holding companies, and provides financial services to depository institutions and the federal government. One of the 12 regional banks that, together with the Board of Governors in Washington, D.C., make up the Federal Reserve System, the Philadelphia Federal Reserve Bank serves eastern Pennsylvania, southern New Jersey, and Delaware.