EARNINGS FORECASTING RESEARCH - ITS IMPLICATIONS FOR CAPITAL-MARKETS RESEARCH - COMMENT

This commentary extends Larry Brown's survey paper on the link between earnings forecasting research and capital markets research by discussing emerging research in four areas: (a) the relation between current earnings and future earnings or the time-series properties of reported earnings; (b) the relation between current earnings and current prices, based on the relation each has with future earnings; (c) the ability to predict future stock returns using accounting information to predict future earnings; and (d) specification issues to consider when estimating price-earnings regressions.