nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2010‒08‒14
four papers chosen by
Alexander Harin
Modern University for the Humanities

  2. Still time to Reclaim The European Union Emissions Trading System for the European Tax Payer By Martin, Ralf; Muûls, Mirabelle; Wagner, Ulrich J.
  3. Social rights and economic objectives: The importance of competition at supra national level By Ojo, Marianne
  4. The Next Financial Crisis By Yochanan Shachmurove

  1. By: Mikk Medijainen
    Abstract: Generational accounting is a relatively recent methodology that measures the fiscal burden government policies impose on future generations. Comparing the fiscal burden of future generations to the burden levied on current newborns yields the generational imbalance. Micro data from the Household Budget Survey is combined with data from the national accounts to construct the generational accounts for current and future generations. The results show that as expected there was a relatively mild intergenerational imbalance (64%) in Estonia in 2009. The generational accounts are sensitive to growth forecasts, while population forecasts seem to be of less influence. To achieve intergenerational balance, an imminent and sustained tax rise to increase tax revenue by 9% should be enforced. Alternatively, the indexing of pensions could be made less generous or government net collective expenditures should be cut by approximately 23%.
    Keywords: generational accounting, fiscal sustainability, Estonia
    JEL: H61 H62 H63 H68
    Date: 2010
  2. By: Martin, Ralf; Muûls, Mirabelle; Wagner, Ulrich J.
    Abstract: The criteria proposed by the EU Commission to identify industries that will receive free emission permits in the third phase of the European Union Emissions Trading System (EU ETS) are not restrictive enough. Evidence from interviews with almost 800 managers in Europe shows that most of the sectors entitled to free emission permits are not facing an increased risk of closure or relocation outside of the EU as a consequence of permit auctioning. Free permit allocation is therefore just a transfer of tax payers' money to industry without any additional social benefit. We propose a simple modification of the Commission's criteria for free permit allocation which could save European tax payers at least €7 billion annually.
    Keywords: Environment
    Date: 2010–05
  3. By: Ojo, Marianne
    Abstract: The need for a supra national model which embraces and provides for social rights of individual Member States is becoming more apparent amidst the ever intensifying integration process within the EU and its involvement in areas which have been undermined by an economic model. This paper considers why, despite such a need for a supra national model, the “ordo liberal European polity” is favoured. It partly does so, by way of reference to two judgements from the European Court of Justice (ECJ) – namely, Laval un Partneri Ltd , and the Viking Cases. Can competition rules (during and beyond periods of financial crises) be designed and implemented in such a way whereby the facilitation of the aims and objectives of the EU Internal Market are optimally realised? To what extent can such rules be reconciled with the all paramount and more highly prioritised goal of sustaining economic and financial stability? Further, to what extent should competition rules be given due prominence – particularly during chronic periods of financial crises? To what extent should competition be encouraged (where it would result in downward spiral and generate unproductive and detrimental results) : to what extent, therefore, should competition rules (within such a context) be respected? These also constitute further questions which this paper seeks to address.
    Keywords: European Court of Justice (ECJ); integration; competition; regulation; ordo-liberalism; economic objectives; social rights; internal market; bank rescues
    JEL: D53 K2 G38 G21
    Date: 2010–08–01
  4. By: Yochanan Shachmurove (Department of Economics, the City Collge of the City University of New York)
    Abstract: The examination of U.S. crises reveals that the current financial crisis follows past patterns. An investment bubble creates excess demand for new financing instruments. During the railroad bubbles of the nineteenth century loans were issued at a pace higher than many companies could pay back. The current housing bubble originated from issuing sub-prime mortgages that assume that housing prices would only rise. The increased demand for credit induces financial innovations and instruments that circumvent existing regulations. Inevitably, the bubble bursts. The history of financial crises teaches that policy reforms and new regulations cannot prevent future financial crises.
    Keywords: Financial Crises; Financial Regulations and Reforms; Banking Panics; Banking Runs; Nineteenth and Twentieth Century Crises; Bankruptcies; Federal Reserve Bank; Subprime Mortgage; Troubled Asset Relief Program (TARP); Collateralized Debt Obligations (CDO); Mortgage Backed Securities (MBO); Glass-Steagall Act; J.P. Morgan Chase; Bear Stearns; Augustus Heinze; Timothy Geithner; Paul Volcker
    JEL: E0 E3 E44 E5 E6 N0 N1 N2 G0 G18 G38
    Date: 2010–08–06

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