Accounting Earnings and Gross Domestic Product

Konchitchki, Yaniv; Patatoukas, Panos N.

doi:10.2139/ssrn.2276774

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Accounting Earnings and Gross Domestic Product

Journal of Accounting and Economics, February 2014

36 Pages Posted: 11 Jun 2013 Last revised: 11 Apr 2014

See all articles by Yaniv Konchitchki

Yaniv Konchitchki

University of California, Berkeley - Haas School of Business

Panos N. Patatoukas

Berkeley Haas

Date Written: October 10, 2013

Abstract

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 predictable based on accounting earnings data that are available to professional macro forecasters in real time.

Keywords: Accounting Earnings, Corporate Profits, Gross Domestic Product (GDP)

JEL Classification: E00, E01, M41

Suggested Citation: Suggested Citation

Konchitchki, Yaniv and Patatoukas, Panos N., Accounting Earnings and Gross Domestic Product (October 10, 2013). Journal of Accounting and Economics, February 2014, Available at SSRN: https://ssrn.com/abstract=2276774 or http://dx.doi.org/10.2139/ssrn.2276774