How seasonal adjustment can affect the message delivered to policy makers : a simulation approach based on the euro area industrial production : 2016 edition

The paper discusses the problem related to seasonal adjustment of euro area short term statistics, with the implications of the availability of member states data at the end of the sample, the alternative strategies to derive the aggregate index and the recommendations of the ESS Guidelines on seasonal adjustment. The results of a simulation approach based on the industrial production are presented, with a comparison between Tramo-Seats and X-12, the treatment of outliers, the estimation of missing countries and the use of an indirect strategy to seasonal adjustment of the euro area aggregate. Results of the empirical analysis suggest that due to the recent crisis the choices regarding seasonal adjustment could affect significantly the message delivered to policy makers.