Processing inflation news: A discussion of Binz, Ferracuti, and Joos (2023)

• 成果类型: Article
• 署名作者: Gallo, Lindsey A.
• 署名单位: University of Michigan System; University of Michigan
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2023.101638
• 发表日期: 2023
• 关键词: internal control; INFORMATION; expectations; management; firm; INVESTMENT; QUALITY

摘要

Binz, Ferracuti, and Joos (2023) examine whether better internal information systems can mitigate the association between inflation and investment. According to Real Business Cycle models, inflation should not impact real decisions like investment, yet empirically the two are positively related. Lucas (1972) theorizes that imperfect information can cause agents to rationally extrapolate from their local set of information to make conclusions about what is happening in aggregate. Motivated by this model, the authors argue that better internal information systems allow managers to disentangle firm-level real shocks from nominal shocks. My discussion evaluates the measurement of internal information quality and questions how distinct it is from external information quality. Next, I relate the findings to a growing literature that examines how individuals and firms form economic expectations. Finally, I consider whether and how these findings can inform policy. (c) 2023 Published by Elsevier B.V.