At the same time, Athanasios Orphanides reconstructed the real-time data and forecasts available to the FOMC from the Greenbooks which are prepared by the Federal Reserve staff for each meeting. The pioneering work of our American collegues has shown that measurement problems do indeed matter for the conduct of monetary policy.
For example, we have learned from their studies that the problem of measurement error is likely to be particularly severe for the output gap - a concept which figures very prominently in much of the recent literature on monetary policy issues. Thus, it is not surprising that researchers outside the US, in particular in Europe, have taken up the issue of real-time data.