Predicting restatements in macroeconomic indicators using accounting information

Journal Article

Earnings growth dispersion contains information about trends in labor reallocation, unemployment change, and, ultimately, aggregate output. We find that initial macroeconomic estimates released by government statistical agencies do not fully incorporate this information. As a consequence, earnings growth dispersion predicts future restatements in nominal and real GDP growth (and unemployment change) both in the in-sample and out-ofsample tests. Further, when we adjust GDP estimates using the out-of-sample restatement predictions, we find statistically and economically significant effects for the monetary policy prescriptions (Taylor rule) and banking regulation (Basel III).

Full Text

Duke Authors

Cited Authors

  • Nallareddy, S; Ogneva, M

Published Date

  • March 1, 2017

Published In

Volume / Issue

  • 92 / 2

Start / End Page

  • 151 - 182

International Standard Serial Number (ISSN)

  • 0001-4826

Digital Object Identifier (DOI)

  • 10.2308/accr-51528

Citation Source

  • Scopus