« Greenspan Warns Redux | Main | -416.02 »

This abstract wants to look at the impact that numerical rounding used in economic reports has on the markets. This may yield some interesting results.

I've noticed that the initial press articles on some data points are often slightly off-key because, say, inflation didn't rise by 0.2%--it really rose by 0.015%. Because they're fairly low numbers, I think the phenomenon is most common with the unemployment and inflation reports.

I should add that there's probably a grad paper to be written (pay attention finance ABDs!!) about the impact of rounding in EPS reporting. I'll bet there are many companies that always seems to land on the decimal of "point five" every quarter (i.e., they earn 52.5 cents a share, or 18.5 cents a share).

Maybe the media could look into it. After all, we live in an era when reporters can win the Polk Award for bravely uncovering some fairly minor accounting misstatements.

Posted by edelfenbein at February 27, 2007 11:32 AM