NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
loading...

Expectations and Investment

Nicola Gennaioli, Yueran Ma, Andrei Shleifer

Chapter in NBER book NBER Macroeconomics Annual 2015, Volume 30 (2016), Martin Eichenbaum and Jonathan A. Parker, editors (p. 379 - 431)
Conference held April 17-18, 2015
Published in June 2016 by University of Chicago Press
© 2016 by the National Bureau of Economic Research
in NBER Book Series NBER Macroeconomics Annual

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.

download in pdf format
   (746 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): https://doi.org/10.1086/685965

This chapter first appeared as NBER working paper w21260, Expectations and Investment, Nicola Gennaioli, Yueran Ma, Andrei Shleifer
Commentary on this chapter:
  Comment, Christopher A. Sims
  Comment, Monika Piazzesi
  Discussion,
Users who downloaded this chapter also downloaded* these:
Arellano, Atkeson, and Wright External and Public Debt Crises
Sims Comment on "Expectations and Investment"
Chang, Chen, Waggoner, and Zha Trends and Cycles in China's Macroeconomy
Fang, Gu, Xiong, and Zhou Demystifying the Chinese Housing Boom
Acemoglu, Akcigit, and Kerr Networks and the Macroeconomy: An Empirical Exploration
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us