ELECTRONIC TRANSACTIONS AS HIGH-FREQUENCY INDICATORS OF ECONOMICS ACTIVITY
John Galbraith and
Greg Tkacz ()
Departmental Working Papers from McGill University, Department of Economics
Since the advent of standard national accounts data over 60 years ago, economists have relied on monthly or quarterly data supplied by central statistical agencies for macroeconomics modelling and forecasting. However, technological advances of the past several years have resulted in new high-frequency data sources that could potentially provide more accurate and timely information on the current level of economic activity. In this paper we explore the usefulness of electronic transactions as real-time indicators of economics activity, using Canadian debit card data as an example. These data have the advantages of daily availability and teh high market penetration of debit cards. We find that (i) household transactions vary greatly according to the day of the week, peaking every Friday and falling every Sunday; (ii) debit card data can help lower consensus forecast errors for GDP growth; (iii) debit card transactions are correlated wtih Statistics Canada's revisions to GDP; (iv) high-frequency analyses of transactions around extreme events are possible, and in particular we are able to analyze expenditure patterns around the September 11 terrorist attacks and the August 2003 electrical blackout.
JEL-codes: E17 E27 E66 (search for similar items in EconPapers)
Pages: 23 pages
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Working Paper: Electronic Transactions as High-Frequency Indicators of Economic Activity (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:mcl:mclwop:2008-04
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