The Coming Long-Run Slowdown in Corporate Profit Growth and Stock Returns
Posted: 21 Sep 2022
Date Written: September, 2022
Abstract
Over the past two decades, the corporate profits of stock market listed firms have been substantially boosted by declining interest rate expenses and lower corporate tax rates. This note's key finding is that the reduction in interest and tax expenses is responsible for a full one-third of all profit growth for S&P 500 nonfinancial firms over the prior two-decade period.
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Suggested Citation: Suggested Citation
Smolyansky, Michael, The Coming Long-Run Slowdown in Corporate Profit Growth and Stock Returns (September, 2022). FEDS Notes No. 2022-09-06, Available at SSRN: https://ssrn.com/abstract=4225226 or http://dx.doi.org/10.17016/2380-7172.3167
Michael Smolyansky (Contact Author)
Board of Governors of the Federal Reserve System ( email )
20th Street and Constitution Avenue NW
Washington, DC 20551
United States
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