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The paper derives and compares historical and real‐time estimates of the UK natural unemployment rate and shows that real‐time estimates are fraught with noise and should be treated with scepticism. A counterfactual exercise shows that, for most of the 1990s, the Bank of England tracked changes in the natural rate relatively successfully, albeit with some recognition lag which, at times, might have led to excessively cautious policy. A careful scrutiny of the minutes of the monetary policy committee meetings reveals that such 'cautiousness' should be taken as evidence of awareness of the real‐time informational limitations that monetary policy is facing.

Publisher's version (útgefin grein) ; Meaningful forecasting of the atmospheric concentration and ground accumulation of volcanic ash during explo-sive eruptions requires detailed knowledge of the eruption source parameters. However, due to the large uncer-tainties in observations and limitations of current models used to make inferences from these, monitoring anongoing eruption and quantifying the mass eruption rate in real-time is a considerable challenge. Within theEU supersite project"FutureVolc", an integrated approach has been applied to develop a quasi-autonomousmulti-parameter system, denoted"REFIR", for monitoring volcanic eruptions in Iceland and assessing the erup-tion massflow rate by inverting the plume height information and taking account of these uncertainties. REFIRhas the capability to ingest and process streaming plume-height data provided by a multitude of ground basedsensors, including C–and X-band radars and web-cam based plume height tracking systems. These observationaldata are used with a suite of plume models that also consider the current wind and other atmospheric conditions,providing statistically assessed best estimates of plume height and mass eruption rate. Provided instrumentaldata is available, near real-time estimates are obtained (the delay corresponding to the scan rate of data-providing instruments, presently of the order of minutes). Using the Hekla 2000, and Eyjafjallajökull 2010 erup-tions in Iceland, the potential of REFIR is demonstrated and discussed through application to three scenarios. Thesystem has been developed to provide maximumflexibility. A setup script assists the user in adapting to localconditions, allowing implementation of REFIR for any volcanic eruption site worldwide. REFIR is designed to beeasily upgradable, allowing future extension of monitoring networks, learning from new events, and incorpora-tion of new technologies and model improvements. This article gives an overview of the basic structure, modelsimplemented, functionalities and the computational techniques of REFIR. ; The development of REFIR has been part of the FUTUREVOLC supersite project and was funded by the European Union's Seventh Programme for research, technological development and demonstration under grant agreement No 308377. TD's work was also funded by the project EVER-EST, as part of the EU's Horizon 2020 research and innovation programme under grant agreement no 674907. ; Peer Reviewed

Most research on monetary policy assumes availability of information regarding the current state of economy, at the time of the policy decision. A key challenge for policy-makers is to find indicators that give a clear and precise signal of the state of the economy in real time—that is, when policy decisions are actually taken. One of the indicators used to asses the economic condition is the output gap; and the estimates of output gap from real time data misrepresents the true state of economy. So the policy decisions taken on the basis of real time noisy data are proved wrong when true data become available. Within this context we find evidence of wrong estimates of output gap in real time data. This is done by comparing estimates of output gap based on real time data with that in the revised data. The quasi real time data are also constructed such that the difference between estimates of output gap from real time data and that from quasi real time data reflects data revision and the difference between estimates of output gap from final data and that from quasi real time data portray other revisions including end sample bias. Moreover, output gap is estimated with the help of five methods namely the linear trend method, quadratic trend method, Hordrick-Prescott (HP) filter, production function method, and structural vector autoregressive method. Results indicate that the estimates of output gap in real time data are different from what have been found in final data but other revisions, compared to data revisions, are found more significant. Moreover, the output gap measured using all the methods, except the linear trend method, appropriately portray the state of economy in the historical context. It is also found that recessions can be better predicted by real time data instead of revised data, and final data show more intensity of recession compared with what has been shown in real time data. JEL Classification: E320 Keywords: Data Uncertainty, Measurement Uncertainty, Output Gap, Business Cycle, Economic Activity