We examine the economywide E/P ratio both over a long time period (1952–2003) and by dividing the entire period into subperiods. We have two main objectives. First, we reexamine the puzzling result documented by Modigliani and Cohn (1979), who find that, contrary to theory, the economy wide...

The variability of accounting accruals provides a measure of the normal level of managers’ accounting discretion and has important implications for event studies of earnings management. We examine how this measure is related to the economic factors including both firm characteristics and...