Expectations and Investment

Nicola Gennaioli, Yueran Ma and Andrei Shleifer

Scholarly Articles from Harvard University Department of Economics

Abstract: Using micro data from Duke University quarterly survey of Chief Financial Officers, we show that corporate investment plans as well as actual investment are well explained by CFOs’ expectations of earnings growth. The information in expectations data is not subsumed by traditional variables, such as Tobin’s Q or discount rates. We also show that errors in CFO expectations of earnings growth are predictable from past earnings and other data, pointing to extrapolative structure of expectations and suggesting that expectations may not be rational. This evidence, like earlier findings in finance, points to the usefulness of data on actual expectations for understanding economic behavior.

Date: 2015
References: Add references at CitEc
Citations: View citations in EconPapers (61)

Published in NBER Macroeconomics Annual

Downloads: (external link)
http://dash.harvard.edu/bitstream/handle/1/3219349 ... estment.Shleifer.pdf (application/pdf)

Related works:
Journal Article: Expectations and Investment (2016)
Working Paper: Expectations and investment (2016)
Working Paper: Expectations and Investment (2016)
Chapter: Expectations and Investment (2015)
Working Paper: Expectations and Investment (2015)
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: https://EconPapers.repec.org/RePEc:hrv:faseco:32193497

Access Statistics for this paper

More papers in Scholarly Articles from Harvard University Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Office for Scholarly Communication ().