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Recent revisions to corporate profits: what we know and when we knew it

Author

Listed:
  • April Bang
  • Brian Chernoff
  • Charles P. Himmelberg
  • James M. Mahoney

Abstract

Initial estimates in the National Income and Product Accounts significantly overstated U.S. corporate profits for the 1998-2000 period. Subsequent revisions reveal that the profitability of the nation's corporate sector in the late 1990s was substantially weaker than \\"real-time\\" data indicated. An unexpected surge in employee stock options exercised-and perhaps, in some sectors, firms' inflated statements of profit-may help explain the large downward revisions.

Suggested Citation

  • April Bang & Brian Chernoff & Charles P. Himmelberg & James M. Mahoney, 2004. "Recent revisions to corporate profits: what we know and when we knew it," Current Issues in Economics and Finance, Federal Reserve Bank of New York, vol. 10(Mar).
    • Handle: RePEc:fip:fednci:y:2004:i:mar:n:v.10no.3
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    References listed on IDEAS

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    1. Mihir A. Desai, 2002. "The Corporate Profit Base, Tax Sheltering Activity, and the Changing Nature of Employee Compensation," NBER Working Papers 8866, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Dieter Brümmerhoff & Michael Grömling, 2013. "Ökonomische Auswirkungen von VGR-Revisionen," AStA Wirtschafts- und Sozialstatistisches Archiv, Springer;Deutsche Statistische Gesellschaft - German Statistical Society, vol. 6(3), pages 133-148, March.
    2. Robert Boyer, 2005. "From shareholder value to CEO power: The paradox of the 1990s," PSE Working Papers halshs-00590848, HAL.
    3. Robert Boyer, 2005. "From shareholder value to CEO power: The paradox of the 1990s," Working Papers halshs-00590848, HAL.
    4. Michael Elsby & Bart Hobijn & Ayseful Sahin, 2013. "The Decline of the U.S. Labor Share," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 44(2 (Fall)), pages 1-63.
    5. Karnizova Lilia, 2012. "News Shocks, Productivity and the U.S. Investment Boom-Bust Cycle," The B.E. Journal of Macroeconomics, De Gruyter, vol. 12(1), pages 1-50, June.
    6. Charles Steindel, 2007. "Household saving and wealth accumulation in the U.S," IFC Bulletins chapters, in: Bank for International Settlements (ed.), Proceedings of the IFC Conference on "Measuring the financial position of the household sector", Basel, 30-31 August 2006 - Volume 1, volume 25, pages 58-70, Bank for International Settlements.
    7. Baghestani, Hamid & Khallaf, Ashraf, 2012. "Predictions of growth in U.S. corporate profits: Asymmetric vs. symmetric loss," International Review of Economics & Finance, Elsevier, vol. 22(1), pages 222-229.

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