This paper explores the effects of measurement error on dynamic forecasting models. The paper sets out to illustrate a trade off that confronts forecasters and policymakers when they use data that are measured with error. On the one hand, observations on recent data give valuable clues as to the...

Several ways of modelling non-linear state space models have been suggested. The extended Kalman Filter is a tractable way of doing so. One application is to consumer durable demand. Models explaining this flow are normally conditioned on the stock. For the UK, measures of the stock are...