nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2008‒04‒29
six papers chosen by
Alexander Harin
Modern University for the Humanities

  1. The Role of Investment Wedges in the Carlstrom-Fuerst Economy and Business Cycle Accounting By Inaba, Masaru; Nutahara, Kengo
  2. Tax Rates and Tax Evasion: An Empirical Analysis of the Structural Aspects and Long-Run Characteristics in Italy By Chiarini, Bruno; Marzano, Elisabetta; Schneider, Friedrich
  3. Avoiding the Value Added Tax: Theory and Cross-Country Evidence By Luiz de Mello
  4. Do differences in financial development explain the global pattern of current account imbalances? By Joseph W. Gruber; Steven B. Kamin
  5. Demography, Financial Openness, National Savings and External Balance By Michael Graff; Kam Ki Tang; Jie Zhang
  6. La creación de los Comités de Auditoría en las Cajas de Ahorros españolas By Álvarez Alonso, José Ignacio

  1. By: Inaba, Masaru; Nutahara, Kengo
    Abstract: Many researches that apply business cycle accounting (hereafter, BCA) to actual data conclude that models with investment frictions or investment wedges are not promising for modeling business cycle dynamics. In this paper, we apply BCA to artificial data generated by a variant model of Carlstrom and Fuerst (1997, American Economic Review), which is one of representative models with investment frictions. We find that BCA leads us to conclude that models of investment wedges are not promising according to the criteria of BCA, although the true model contains investment frictions.
    Keywords: Business cycle accounting; investment wedge; investment friction; wedge decompsition
    JEL: C68 E32 E13
    Date: 2008–04–19
  2. By: Chiarini, Bruno (University of Naples, Parthenope); Marzano, Elisabetta (University of Naples, Parthenope); Schneider, Friedrich (University of Linz)
    Abstract: By using official time series of the Italian evaded VAT base (Ministry of Finance) for the period 1980-2004 we investigate empirically the long-run characteristics of tax evasion and the relationship with the tax burden. We focus on three important issues not analyzed so far. First, using different measures of aggregate economic activity as reference variables in estimating the average tax burden, we investigate the size and dynamics of the over-burden traceable back to tax evasion. Second, exploiting cointegration techniques, we quantify the elasticity between tax evasion and the average tax rate in Italy. We then comment on the complex dynamic interaction between tax burden and tax evasion, to ascertain whether in the Italian experience there is evidence for any “vicious circle” between them.
    Keywords: tax evasion, VAT evasion, effective tax rate, apparent tax rate, VECM
    JEL: H30 H26 O17 C32
    Date: 2008–04
  3. By: Luiz de Mello
    Abstract: This paper develops a differential game of tax avoidance by modelling the interactions between a taxpayer and the tax authority. This framework is particularly useful for explicitly modelling situations of conflict. The solution to the game is a non-co-operative Nash that depends on the resources that need to be used by the tax authority to enforce legislation and the cost to be borne by the taxpayer in tax compliance, provided that the curvature of the utility functions is bounded. Empirical evidence is provided for the value added tax (VAT) using a cross-section of OECD and non-OECD countries. OECD indicators of tax administration efficiency are included in the regressions. The empirical findings show that VAT efficiency, defined as the ratio of collections as a share of consumption to the statutory rate, rises the lower the VAT rate, the lower the share of administrative costs in tax revenue (proxying for the efficiency of tax administration), the more pro-competition the regulatory framework in product markets (measuring non-tax incentives for non-compliance) and the better the country’s governance indicators (regulatory quality, rule of law and government effectiveness). This paper is forthcoming in the Public Finance Review. <P>Évasion de la TVA : Théorie et Comparaisons Internationales <BR>Ce document développe un jeu différentiel des évasions fiscales en modélisant les interactions entre les contribuables et les administrations fiscales. Ce cadre est particulièrement adapté à la modélisation des situations de conflit. La solution du jeu est un équilibre de Nash non-coopératif qui dépend des ressources dont ont besoin les administrations fiscales pour appliquer la législation et les coûts imputés aux contribuables dans le respect des obligations fiscales, à condition que la dérivée première de la fonction d’utilité soit bornée. L’analyse empirique utilise la TVA d’un échantillon de pays de l’OCDE et non-OCDE. Les indicateurs OCDE d’efficacité des administrations fiscales sont intégrés aux régressions. Les résultats montrent que l’efficacité de la TVA (définie comme le ratio entre les revenus de la TVA divisé par la consommation et le taux de la TVA), augmente inversement au taux de la TVA et à la part des coûts administratifs dans les revenus des impôts (un indicateur d’efficacité des administrations fiscales). Par contre, l’efficacité de la TVA augment proportionnellement au biais pro-compétition des réglementations des marchés des produits et aux indicateurs de bonne gouvernance (qualité des réglementations, règle de droit et efficacité du gouvernement). A paraître prochainement dans Public Finance Review.
    JEL: C70 E62 H26
    Date: 2008–04–14
  4. By: Joseph W. Gruber; Steven B. Kamin
    Abstract: This paper addresses the popular view that differences in financial development explain the pattern of global current account imbalances. One strain of thinking explains the net flow of capital from developing to industrial economies on the basis of the industrial economies' more advanced financial systems and correspondingly more attractive assets. A related view addresses why the United States has attracted the lion's share of capital flows from developing to industrial economies; it stresses the exceptional depth, breadth, and safety of U.S. financial markets. ; In this paper we empirically test these hypotheses. Building on Chinn and Prasad (2003) and Gruber and Kamin (2007), we assess econometrically whether different measures of financial development explain the net flow of capital from developing to industrial economies, as well as the concentration of those flows toward the United States. We also assess whether differences in asset returns, an alternative measure of the attractiveness of financial assets, can explain the international pattern of capital flows. ; We find little evidence that differences in financial development help to explain the global pattern of current account imbalances. The measures of financial development generally do not explain either the net flow of capital from developing to industrial economies or, more specifically, the large U.S. current account deficits. Lower bond yields have been generally associated with lower current account balances (e.g., larger deficits) in industrial countries. However, U.S. bond yields have not been significantly lower than in other industrial economies, nor have expected equity earnings yields. This suggests, contrary to conventional wisdom, that U.S. financial assets have not been demonstrably more attractive than those of other industrial economies, and hence cannot explain the large U.S. deficit. ; Finally, we consider the alternative but related hypothesis that spending in the United States was uniquely responsive to the lower cost of credit stemming from capital inflows from developing countries, thus accounting for the outsized U.S. deficit. However, we found this hypothesis also to be weak, as household saving rates have declined throughout the industrial economies, not just in the United States.
    Date: 2008
  5. By: Michael Graff (KOF Swiss Economic Institute, ETH Zurich); Kam Ki Tang (School of Economics, University of Queensland, Australia); Jie Zhang (School of Economics, University of Queensland, Australia)
    Abstract: This paper examines the impact of demographic factors on saving, investment, and external balances. We derive a number of semi-structural equations from national accounting principle and the principle that external balances for the world as a whole must sum to zero. The resulting equations embody both closed, partially open and completely open economies as special cases, and are arguably more properly specified than those previously used in the literature. We apply these semi-structural equations to a large panel data set. While our findings by and large are in agreement with most previous studies, our semi-structural equations give much more plausible estimation results for saving and investment than conventional specification
    Keywords: Demography, openness, saving, investment, current account, panel data
    JEL: E21 F32 J10
    Date: 2008–04
  6. By: Álvarez Alonso, José Ignacio (Universidad de Valladolid)
    Abstract: La investigación es novedosa en cuanto se ocupa de instituciones de naturaleza peculiar como las Cajas, que combinan rasgos propios de las fundaciones con los de las entidades de crédito. De otro lado, se refiere a España, país de “civil law”, con una tradicional menor protección de los intereses de los inversores y una menor calidad de la información contable (La Porta et al.1999). La presencia de la auditora líder y la mayor participación de los impositores en los órganos de decisión y control, resultan ser - dentro del enfoque de la teoría de la agencia- factores explicativos negativamente relacionados con la creación del Comité de Auditoría en las Cajas, al reducir el conflicto de agencia existente en éstas.
    Keywords: Comités de Auditoría, Costes de Agencia, Gobierno Corporativo, Cajas de Ahorros, Especialización del auditor.
    JEL: G21 G34 M42
    Date: 2007–12

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