Informational Foundations for the Macroeconomic Role of Aggregated Accounting Disclosures

[摘要] I show that accounting reports contain macroeconomic signals that, when aggregated, inform agents about the economic state. These signals influence agents' economic decisions and therefore impact future economic growth. These effects are rooted in accounting's unique role in aggregating and transmitting the information content of individual transactions. As more transactions are aggregated, the strength and precision of the macroeconomic signal in accounting reports increases. Consequently, the macroeconomic information in accounting reports is greater during good states of the economy, when transaction volume is high, than bad states, when the volume is low. My tests indicate that aggregate accounting information contains roughly double the macroeconomic information content in good states relative to bad. Further, the macro content of earnings grows throughout good economic states as agents become more confident and the information environment improves, consistent with the information dynamics predicted by macroeconomic theory. My results open a number of avenues for future research, including how attributes of accounting information can aid or hinder the transfer of macroeconomic signals.

[发布机构] Rice University

[效力级别] Cycle