Central Banks have found that venturing into the digital transformation with an increasing use of big data, a process that was accelerated because of the sanitary crisis, helps ease somewhat these trade-offs. Many central banks have broadened the analysis using less traditional sources derived from the so-called "open" data available on the Internet. They started to apply big data techniques, such as web scraping, machine learning or text analysis, for collecting and transforming data on prices, job vacancies or retail sales, among others. As a result, it became possible to release new indicators with higher frequency and timeliness. This has contributed to a better understanding of economic phenomena, providing up to date empirical support to the implementation of monetary policy and financial stability mandates. 1  New sources of information In our case, at the Central Bank of Chile we have embarked in several efforts to expand and improve the data available. For the first time, starting in June, we released regional gross domestic product and household consumption on a quarterly basis, with a lag of a few months. This advance enhances data robustness and provides valuable information for economic analysis and public policy decisions by increasing the frequency and opportunity with which we can measure regional economic conditions, which until recently was available only annually.
4  BIS Review 71/2004  In fact, recent work by Bank staff has shown that, even when preliminary ONS estimates are available, combining these with the information from the business surveys can provide a more accurate assessment than if we were to throw the business survey information away and rely solely on the ONS data. This type of analysis is influencing our judgement at the moment. The ONS’s preliminary estimate of GDP growth in the third quarter was just 0.4%, suggesting a marked slowdown in growth driven by a sharp contraction in industrial output. But business surveys suggest that manufacturing output continues to expand. Taking these two pieces of information together, the MPC judges that overall growth was a little higher in Q3 than the official data currently indicate. We talk to people A third way of reducing the risk of error is to talk to people on the ground. If the hard data are at odds with what they are telling us, that will give us pause for thought - about the likely economic outlook, or at least the risks around our central view. Back in the early 90s a familiar charge against the Treasury (which at that time had primary responsibility for setting interest rates) was that they were out of touch - stuck in London, they missed early signs of the recession. The Bank has been careful to avoid this trap. It has built up a network of agencies to act as its eyes and ears around the country.