Binz, Oliver; Graham, John R.; Kubic, Matthew - National Bureau of Economic Research - 2024
Financial reports present assets, liabilities, and earnings on a nominal basis (unadjusted for inflation). Using a … between accounting earnings and stock market value, i.e., earnings relevance. On the one hand, inflation may decrease earnings … the price level. On the other hand, inflation may increase earnings relevance by increasing firms' discount rates and …