TY  - JOUR
AU  - Gennaioli, Nicola
AU  - Ma, Yueran
AU  - Shleifer, Andrei
TI  - Expectations and Investment
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 21260
PY  - 2015
Y2  - June 2015
DO  - 10.3386/w21260
UR  - http://www.nber.org/papers/w21260
L1  - http://www.nber.org/papers/w21260.pdf
N1  - Author contact info:
Nicola Gennaioli
Department of Finance
Università Bocconi
Via Roentgen 1
20136 Milan, Italy
E-Mail: nicola.gennaioli@unibocconi.it

Yueran Ma
Booth School of Business
University of Chicago
5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
Tel:  
E-Mail: Yueran.Ma@chicagobooth.edu

Andrei Shleifer
Department of Economics
Harvard University
Littauer Center M-9
Cambridge, MA 02138
Tel: 617/495-5046
Fax: 617/496-1708
E-Mail: ashleifer@harvard.edu
M1  - published as Nicola Gennaioli, Yueran Ma, Andrei Shleifer. "Expectations and Investment," in Martin Eichenbaum and Jonathan A. Parker, editors, "NBER Macroeconomics Annual 2015, Volume 30" University of Chicago Press (2016)

M3  - presented at "30th Annual Conference on Macroeconomics", April 17-18, 2015
AB  - 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.
ER  -