nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2014‒11‒01
five papers chosen by
Alexander Harin
Modern University for the Humanities

  1. Fiscal extension to ORANI-IT: a computable general equilibrium model for Italy By Felici Francesco; Maria Gesualdo
  2. Global and European Imbalances:A critical review By Carlos A. Carrasco; Felipe Serrano
  3. Capital Inflows, Current Accounts and Investment Cycle in Italy: 1861-1913 By Barbara Pistoresi; Alberto Rinaldi
  4. Productivity: What Is It? How Is It Measured? What Has Canada's Performance Been Over the Period 1961 to 2012? By Macdonald, Ryan; Gu, Wulong; Baldwin, John R.; Yan, Beiling
  5. Can Financial Stability be Maintained in Developing Countries after the Global Crisis: The Role of External Financial Shocks? By Hasan Comert; Mehmet Selman Colak

  1. By: Felici Francesco; Maria Gesualdo
    Abstract: In this paper we expand the national multi-sectoral computable general equilibrium (CGE) model ORANI-IT, allowing for a number of fiscal tools. The outcome is a computable general equilibrium tax model of Italy, developed at the Department of Treasury of the Italian Ministry of the Economy and Finance, in collaboration with the Centre of Policy Studies (CoPS), and currently managed at Sogei S.p.A. (IT Economia - Modelli di Previsione ed Analisi Statistiche). The paper demonstrates in considerable detail the methodology to incorporate a fiscal extension, that mainly consists in including a detailed tax information into existing commodity and production tax matrices, to the existing national model. In particular, the procedure to accommodate national data on tax revenues within the model’s database and explicitly model the full range of indirect taxes within the theoretical structure is reported. Within the fiscal extension, the model includes a comprehensive model of Value-Added-Tax (VAT), which accounts for all the typical features of a complex VAT system - such as multi-production, multiple tax rates, different degrees of exemptions and refundability factors - as well as of EU-specific matters relating to taxation of intra-EU exports, and to the scope of VAT and exemptions of public interest. Interestingly, the framework developed in this paper for Italy may be extendible to other European countries, which fall within the EU VAT legislation. The model also features a special emphasis on sectors national accounts, with a detailed system of equations describing government and households budget revenues and expenditures and transactions with the rest of the world. The output is a powerful tool for acquiring new insights on the current fiscal system, through the assessment of tailored fiscal reforms, which can consist of either changes in tax rates and tax bases. Future research may be pursued in the application of the model for evaluating alternative policies.
    Keywords: Computable general equilibrium (CGE) tax models, indirect taxes, value-added-tax, sector accounts, Italy
    JEL: C68 H20 H25
    Date: 2014–09
  2. By: Carlos A. Carrasco (University of the Basque Country (EHU/UPV)); Felipe Serrano (University of the Basque Country (EHU/UPV))
    Abstract: In this paper, we survey and analyse the economic literature on global and European imbalances and their connection with the global financial crisis. In the years preceding the crisis, there was increased attention to the existence of large current account imbalances among large economies worldwide. Research and policy papers divided into two positions regarding these imbalances. Some authors viewed global imbalances as part of a new equilibrium in the international financial system. Others urged policy intervention to reduce these imbalances. The Great Recession revived the debate over global imbalances and their influence on the gestation of the crisis. However, more recent work has clarified the relationship between the crisis and global imbalances, emphasising the roots of the crisis in financial liberalisation and the fragility of the international financial system. From this perspective, we highlight the need for deeper analysis of gross capital flows and the need to monitor credit levels as measures to prevent future financial crises.
    Keywords: savings glut, current account, global imbalances, financial fragility
    JEL: E44 F32 F33 F44 G15
  3. By: Barbara Pistoresi; Alberto Rinaldi
    Abstract: By relying on a new dataset, this paper presents an econometric strategy to test the Fenoaltea’s thesis with regard to both the genesis of current account fluctuations and of the investment cycle. We perform a Granger causality test that shows that the persistent current account deficits in the years from unification from WW1 were generated by variations in capital inflows, as pointed by Fenoaltea, and not by the dynamics of the GDP, as claimed by the Bonelli-Cafagna model. Finally, this paper supports the Fenoaltea’s thesis that these capital inflows prompted a general investment cycle which included both construction and industrial investments
    Keywords: Capital imports, current accounts, investment cycle, Italy, integration, cointegration and Granger causation analysis
    JEL: F43 O11 N1 N7
    Date: 2014–04
  4. By: Macdonald, Ryan; Gu, Wulong; Baldwin, John R.; Yan, Beiling
    Abstract: This paper provides an overview of the productivity program at Statistics Canada and a brief description of Canada?s productivity performance. The paper defines productivity and the various measures that are used to investigate different aspects of productivity growth. It describes the difference between partial productivity measures (such as labour productivity) and a more complete measure (multifactor productivity) and the advantages and disadvantages of each. The paper explains why productivity is important. It outlines how productivity growth fits into the growth accounting framework and how this framework is used to examine the various sources of economic growth. The paper briefly discusses the challenges that face statisticians in measuring productivity growth. It also provides an overview of Canada?s long-term productivity performance and compares Canada to the United States?both in terms of productivity levels and productivity growth rates.
    Keywords: Economic accounts, Productivity accounts
    Date: 2014–09–15
  5. By: Hasan Comert (Department of Economics, METU); Mehmet Selman Colak (Central Bank of Republic of Turkey)
    Abstract: In the recent global turmoil, even though some developing economies were severely affected, in general, developing countries survived the crisis with less damage than advanced countries. The majority of developing countries did not experience a financial system collapse. What are the main factors behind the solid performance of many developing countries in the recent crisis? This paper argues that the main reason is the fact that developing countries did not face a strong financial account shock, especially in the form of capital reversals, during this period. In comparison to past developing country crises of the 80s and 90s, the financial account shocks in the global crisis were much more moderate. To a great extent, the fact that advanced countries could not fully serve their roles as safe havens in the global crisis explains why developing economies were not tested by destructive financial shocks in the recent crisis. Furthermore, developing countries enjoyed greater autonomy and legitimacy in implementing expansionary monetary and fiscal policies without much fear of the bigger financial shocks in an environment in which international cooperation partially meet the need for an international lender of last resort through swap operations and credit lines. If the developed countries, essentially European Union (EU) and the US, start serving fully their safe haven roles and the returns in the developed countries become much more attractive, developing countries may face larger external financial shocks. Even large reserves, flexible exchange rate regimes, healthy balance sheets on the papers and some so-called other strong fundamentals would not be enough to avoid financial collapses.
    Keywords: Developing Countries, Recent Global Crisis, Financial Flows and Financial Markets.
    JEL: E52 E58 F32 F31 G15
    Date: 2014–09

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