Data revisions to national accounts pose a serious challenge to policy decision
making. Well-behaved revisions should be unbiased, small and unpredictable.
This paper shows that revisions to German national accounts are biased, large
and predictable. Moreover, using filtering techniques designed to process data
subject to revisions, the real-time forecasting performance of initial releases can
be increased by up to 17%. For total real GDP growth, however, the initial release
is an optimal forecast. Yet, given the results for disaggregated variables, the
averaging-out of biases and inefficiencies at the aggregate GDP level appears to
be good luck rather than good forecasting.