The Econometric SocietyEdited by: Guido W. Imbens • Print ISSN: 0012-9682 • Online ISSN: 1468-0262
Econometrica: Mar, 1970, Volume 38, Issue 2
https://doi.org/0012-9682(197003)38:2<231:PIOFRD>2.0.CO;2-7
p. 231-250
Roger N. Waud
It is often argued that discount rate changes have a "psychological" impact on the public's expectations about the future course of the economy; it is alleged that such changes affect economic activity by influencing the expectations of businesses, financial institutions, and other economic actors. This study attempts to assess the veracity of the notion that there is such an effect of expectations. We begin with the premise that any change in expectations about future net cash accruing to business enterprises really reflects changes in expectations about future economic conditions in general, and that changes in expectations about future cash flows will be reflected in the discounted present value of business firms and hence the market value of equity shares. After removing systematic components from such data, and analysis of the random component strongly suggests that there is an "announcement effect" on expectations associated with discount rate changes, and that there seems to be a consensus as to what the inferred information content of such changes portends for future economic conditions. Also, on days immediately preceding discount rate decreases, there seems to be come evidence of anticipation of the change.
March 5, 2024
The terms of the Editors of the Econometric Society's three journals end June 30, 2025. We are pleased to announce the incoming Editors and to thank the outgoing Editors for their excellent and continuing service.
Econometrica: Since 2019, Guido Imbens has served as the 14th Editor of Econometrica. On July 1, 2025, Marina Halac will become the Editor.
Quantitative Economics: Stéphane Bonhomme has been the Editor of Quantitative Economics since 2021. His successor will be Bernard Salanié.
Theoretical Economics: The Editor of Theoretical Economics since 2021 has been Simon Board. Taking over for him in July 2025 will be Federico Echenique.
Guido, Stéphane, and Simon have been outstanding Editors. We are grateful to them for the work they have done and will continue to do, and we look forward to further congratulating them next year. We believe Marina, Bernard, and Federico will be outstanding successors and we thank them in advance for their service.
Finally, we are grateful to Larry Samuelson for chairing all three search committees, and we thank the search committee members for their hard and fruitful work:
Econometrica: Christian Dustmann, Lars Hansen, Alessandro Lizzeri, George Mailath, Ariel Pakes, Helene Rey, and Elie Tamer.
QE: Kate Ho, Michael Keane, Felix Kubler, Whitney Newey, and Frank Schorfheide.
TE: Jeff Ely, Johannes Horner, Gilat Levy, Meg Meyer, and Ran Spiegler.
