Pandemic Era Data Gaps Documented

We have to take a victory lap. A major central bank just released research validating a point we have been making all summer. about data and predictive analytics.

Do you remember earlier in the summer when we published this pair of blog posts highlighting

how the pandemic creates data gaps

and why they matter.....

Last week, De Nederlandsche Bank (the Dutch central bank) validated our analysis.

They released research showing that key inputs for HIPC inflation measures were not collected during March and April. Because the HIPC data is only updated annually, policymakers were only able to use same-month 2019 data as a proxy for 2020 prices in key sectors disrupted by the pandemic.

While the data gap was resolved, actual price data diverged significantly from the estimated data. AND the composition of consumption changed materially during the period, raising real questions about the predictive nature of HIPC data going forward. Actual inflation was much higher than either estimated amounts AND headline inflation:

It is fair to assume that the Netherlands is not alone in experiencing these discrepancies even if it might be the only central bank shining a spotlight on the situation.


Risk managers and global macro traders that automatically input official sector data feeds into their algorithmic and AI-driven trading models must pay more attention to data inputs during the pandemic period. Blindly using previously reliable data with recognizing the break in the time series sets up their models for erroneous outcomes. They must also start exploring more proactively a range of alternative data components that can provide greater insight into forward policy trajectories.


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