We document that aggregate accounting earnings growth is an incrementally significant leading indicator of growth in nominal Gross Domestic Product (GDP). Professional macro forecasters, however, do not fully incorporate the predictive content embedded in publicly available accounting earnings data. As a result, future nominal GDP growth forecast errors are… (More)
In this study, we hypothesize and find that financial statement analysis of firm profitability drivers applied at the aggregate level yields timely insights that are relevant for forecasting real economic activity. We first show that focusing on the 100 largest firms offers a cost-effective way to extract information embedded in accounting profitability… (More)
a r t i c l e i n f o a b s t r a c t Event studies are based on the theoretical framework of efficient capital markets and the notion that security prices include all information available to the market. As a result, announcements made by firms provide to market participants information that can be impounded into the market price. This paper investigates… (More)
The monetary unit assumption of financial accounting assumes a stable currency (i.e., constant purchasing power over time). Yet, even during periods of low inflation or deflation, nominal financial statements violate this assumption. I posit that, while the effects of inflation are not recognized in nominal statements, such effects may have economic… (More)
Accounting systems researchers have long had an interest in " knowledge management " (KM), where KM can be referred to as the processes managers use to create and leverage knowledge within the firm. In addition, the Big 4 are large providers of KM services and managers currently invest tens of billions of dollars annually in KM. However, despite case study… (More)
(editor) for helpful comments and suggestions. I am grateful for helpful information from Thomas Stark of the Federal Reserve Bank of Philadelphia and Yvetta Fortova of the Federal Reserve Bank of St. Louis.
a r t i c l e i n f o Keywords: Knowledge management MAKE award winners Market study Delphi method Asset pricing Capital markets Stock valuation Researchers have used the stock price reaction to firms' disclosures of investment in information technology to investigate the value of those investments. This paper extends that research to include knowledge… (More)
The monetary unit assumption of financial accounting assumes a stable currency ͑i.e., constant purchasing power over time͒. Yet, even during periods of low inflation or deflation, nominal financial statements violate this assumption. I posit that, while the effects of inflation are not recognized in nominal statements, such effects may have economic… (More)