2. When It’s Not Business As Usual
Michael Smedes
National Accounts Branch
Australian Bureau of Statistics

3. Overview Australian Context Dramatic Price Change Misbehaving Models
Government Stimulus
Gaps & Weaknesses Exposed
Time Series Challenges
Conclusion

4. Australian GFC Context

5. Australian GFC Context

6. Australian GFC Context

7. Dramatic Price Change Exchange rate and commodity price volatility
Coal: +200% 2008, – 60% 2009
Iron Ore : +70% 2008, – 33% 2009
Australian to US $: 98c July 08, 61c Oct 08, 84c Sept 09
Price Indexes
Point in time pricing
Timing & flow through
Aligning prices and values
Representativeness

8. Misbehaving Models Finance Industry Cash rate moves
Lack of timely data
Use of imputes and trended estimates
Cash rate moves
7.25% March 08, 3.25% Feb 09
Nature of the service provided
Price and volume components
Investment banks fees structures

9. Government Stimulus Economic stimulus packages
Around $60 billion in various initiatives
Cash payments, tax breaks, subsidies, infrastructure
Determine conceptual treatment
Ensure data sources will capture
Informing users on treatment
Informing users on impacts?

10. Gaps & Weaknesses Exposed
Example - Inventories
Difficult to measure
Dramatic changes in volumes and prices
Hasn't followed historical patterns
But very important!
Discrepancy can arise right when users need quality data the most
Quarterly Supply Use

11. Time Series Analysis Impact of unusual events
Large extreme irregular
Change to the seasonal pattern
Change in the level of the series
Concurrent Seasonal Adjustment vs Fixed Factors
Key Issues
Judgement
Consistency and coherency
Keeping users informed

12. Large Extreme Irregular

13. Conclusion Estimation or imputation are risky when economy is turning
Gaps and weaknesses are exposed
Where we do have quality data sources events were picked up
Uncertain times can tell us a lot about the quality of our data
Judgement & an understanding of the data are critical
Coherency and consistency are tested
Importance of user communication