Growth Versus Margins: Destabilizing Consequences of Giving the Stock Market What it Wants

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dc.contributor.author	Stein, Jeremy
dc.contributor.author	Aghion, Philippe
dc.date.accessioned	2010-02-19T14:17:17Z
dc.date.issued	2008
dc.identifier.citation	Aghion, Philippe, and Jeremy C. Stein. 2008. Growth versus margins: Destabilizing consequences of giving the stock market what it wants. Journal of Finance 63, no. 3: 1025-1058.	en_US
dc.identifier.issn	0022-1082	en_US
dc.identifier.uri	http://nrs.harvard.edu/urn-3:HUL.InstRepos:3660730
dc.description.abstract	We develop a model in which a firm can devote effort either to increasing sales growth, or to improving per-unit profit margins. If the firm's manager cares about the current stock price, she will favor the growth strategy when the market pays more attention to growth numbers. Conversely, it can be rational for the market to weight growth measures more heavily when it is known that the firm is following a growth strategy. This two-way feedback between firms' strategies and the market's pricing rule can lead to excess volatility in real variables, even absent any external shocks.	en_US
dc.description.sponsorship	Economics	en_US
dc.language.iso	en_US	en_US
dc.publisher	Blackwell Publishing	en_US
dc.relation.isversionof	http://dx.doi.org/10.1111/j.1540-6261.2008.01351.x	en_US
dash.license	LAA
dc.title	Growth Versus Margins: Destabilizing Consequences of Giving the Stock Market What it Wants	en_US
dc.relation.journal	Journal of Finance	en_US
dash.depositing.author	Stein, Jeremy
dc.date.available	2010-02-19T14:17:17Z

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