Search results

Explains how and why the household should, and could, be an object of analysis for a new social accounting. It shows that the household has been neglected in national income accounting, which generally tends to represent it as a black box. It also shows how the data from national income accounting can be reworked to demonstrate the importance of the household at macro and meso levels. The reworking shows that 84 per cent of GDP passes through the household just as, at the meso level, there are important differences between households in how they pool, spend and save income.

This paper aims to suggest ways to complete the enhancement of the policy responses to systemic banking crises that followed the Great Financial Crisis.

An integrated macrofinancial analytical framework was designed to overcome the segregation between macro work, based on national accounting concepts, and prudential oversight of financial institutions, based on business accounting and concepts.

The design and implementation of the integrated macrofinancial framework are within reach, supported by extensive ongoing research work around the world, and correspond to rising expectations by the international community. It will lead to improvements in the way systemic banking crises are managed. Even more importantly, it offers a promising avenue to make further progress in the prevention of future crises.

The main limitations are the need to overcome the well-known constraints of national accounting, and to overcome the enduring silo separating macro-economists from financial sector experts. The implications are the need for extensive additional interaction between these two groups of experts.

The practical, operational implications are extensive, and could yield a major impact on the global financial stability work agenda. The design of policy responses to systemic banking crises could be profoundly affected, in particular with regard to the target of these responses (corporates vs banks in particular).

The direct and indirect costs of systemic banking crises could be reduced, with widespread benefits for society at large.

This is a fully original new proposed approach with extensive operational value for practitioners.

Indicators of economic and social phenomena can be useful descriptive and analytical inputs for public policy. The “social indicators movement” has emerged in the last decade and is devoted to the measurement of widely‐ranging dimensions of human welfare. For the most part, questions of systematic measurement for public policy are explored here. Drawing initially on some traditions of measurement in economics, the principal aim is to provide a broad theoretical frame of reference for policy indicator design. Questions of indicator development necessarily involve ideas of suitability or validity of indicators designed for a purpose. Approaches to indicator design for the purpose of enhancing collective decision‐making—including formal model building approaches—are subsumed as special cases once a more general theory is espoused in sections II and III.

The purpose of this paper is to examine the role of natural resources accounting in sustainable development. Natural resource accounting is important because the welfare of a nation measured in terms of gross domestic product (GDP) has several weaknesses.

This paper achieves this objective by identifying the present status, the constraints and the challenges for the economics and accounting professions.

The main weakness of GDP as a measure of development is that it does not take into account damages to environmental resources. However, the improvement of the concept to include environmental resource use is made difficult because of the difficulties of measuring environmental damage. The challenge to the economics and accounting profession is to ensure interdisciplinary collaboration, development of a framework to explicitly include the environment, development of credible valuation procedures for the environment, and inclusion of the various ethical positions advanced by various groups on the value of the environment.

Some headway has been made on these issues during the last decade but a major challenge still lies ahead in further improving these approaches so that sustainable development becomes an achievable goal.

This paper brings together diverse views and fusing them together providing a future path for research in environmental accounting to achieve sustainable development.

State and federal revenues fell well short of projections in 2002. While revenues normally turn down in a recession, those revenue shortfalls were much greater than would have been expected given how mild the 2001 recession turned out to be. This paper examines some of the reasons for the large forecast variances observed in recent years using specific examples from forecasts made for the state of Minnesota. Key factors identified include inaccurate forecast for U.S. economic growth; inadequate, untimely and inaccurate data; imperfect models; and unrecognized changes in the structure of the economy. These factors came together and reinforced each other, ultimately producing a larger reduction in state revenues than could have been anticipated in advance.

This paper uses the monetary demand approach of Tanzi (1983) to develop plausible estimates of the size of the hidden income and extent of tax evasion in Malaysia for the period 1971 to 1994. Key influences are income tax rates, the rate of interest, rate of inflation, and structural change in the financial market. Estimates of the size of the hidden economy range from a high of 8.7 per cent of GNP in 1980 to a low of 3.7 per cent in 1993, with tax evasion accounting for an average of just over 20 per cent of actual income tax collections over the period.

Assesses the main factors affecting employment in the Arab Gulf region. In particular: What are the main determinants of employment in the region? How do these determinants vary between national and foreign workforces? Have these determinants changed over time? The results, particularly for the 1980‐85 period, suggest that labour market mismatches may be increasing in the Arab World. This is essentially the problem of too many PhDs and too few mechanics. The symptom of this would be relatively high levels of disguised unemployment among the highly educated, coupled with a shortage of artisans. The damage arising from these skill mismatches lies in the way the various economic sectors are likely to expand while faced by labour constraints. These findings suggest that reforms of both the educational system and the hiring practices of Government agencies will be critical to restoring increases in productivity and ultimately expanded rates of non‐oil income.

Malaysia is one of the high performing economies (HPE) in Southeast Asia. It had experienced strong growth and development for the period between 1957 and 1995. Socioeconomic planning, structural and trade adjustments, and adoption of pragmatic policies that promoted agriculture as well as the manufacturing sub‐sector resulted in higher productivities, incomes and standards of living. Policymakers were also successful in adopting policies that mitigated poverty and, to a lesser extent, decreased income inequality.

The purpose of this paper is to provide estimates of factor income shares for 79 developed, developing and transition economies representing close to 90 percent of the world output and to test for income share convergence.

The paper uses data from the United Nations National Accounts and World Bank World Development Indicator databases and the factor-income-share estimation methodology developed in Bernanke and Gurkaynak (2001) and Gollin (2002).

The authors estimate indicated that the average levels of capital income (profit) shares in developing and transition countries are 1.4-1.5 times higher than in developed economies. During the period studied, profit shares in all groups of countries trended upwards. As a result, the “global” profit share increased thus extending the “labor share squeeze” of the 1980s and 1990s.

The finding of persistent and significant differences in factor shares in countries of different development levels calls into question the assumption of uniform factor shares’ often made in studies of economic growth. The detection of a broadly based upward trend in profit shares has implications for studies of income distribution and inequality.

The paper's contribution is in providing updated estimates of factor income shares for the broad sample of countries, including in particular transition economies, not covered in previous studies; confirming the positive link between profit share and country's income level; countering claims of factor income convergence and establishing the upward trend in “global” profit share.

Theoretical arguments have indicated that long‐term accounting‐based performance plans motivate executives to improve long‐run firm performance (Smith and Watts, 1982; Larcker, 1983). Following conflicting empirical evidence related to the stock market reaction associated with the adoption of accounting‐based long‐run performance plans, this study seeks to gain further insight into the effect of such plans on accounting income‐based and value added‐based measures of productivity and return. The results indicate that firms adopting accounting‐based performance plans do not experience any greater gains in accounting return or productivity measures than do a set of control firms. Thus, such plans may not have the intended effect. Because performance plans are a popular method of executive incentive compensation, further research on the impact of these plans is indicated.