Economics at your fingertips  

GDP announcements and stock prices

Yoshito Funashima, Nobuo Iizuka and Yoshihiro Ohtsuka

Journal of Economics and Business, 2020, vol. 108, issue C

Abstract: Timely GDP announcements seem to be a useful approach for communicating immediate macroeconomic conditions; however, inaccuracy might instead trigger financial market turmoil. This study examines the stock market response to GDP announcements in Japan and provides several insights into the trade-off between timeliness and accuracy. First, the effect of the initial GDP announcement on stock price is tenuous at best, suggesting little useful information in the provisional estimates. Second, the stock market responds keenly to the first revision, but poorly to the second revision. Finally, depending on the expenditure components of GDP, the revisions cause over- and under-reactions, and thus, are different destabilizing factors in stock prices.

Keywords: GDP announcements; Data revisions; Stock prices (search for similar items in EconPapers)
JEL-codes: C58 E44 G14 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

DOI: 10.1016/j.jeconbus.2019.105872

Access Statistics for this article

Journal of Economics and Business is currently edited by Emanuele Bajo and Moritz Ritter

More articles in Journal of Economics and Business from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

Page updated 2021-09-15
Handle: RePEc:eee:jebusi:v:108:y:2020:i:c:s0148619519302772