scholarly journals Assessing the sustainable nature of housing-related taxation receipts: the case of Ireland

2016 ◽  
Vol 9 (2) ◽  
pp. 193-214 ◽  
Author(s):  
Diarmaid Addison Smyth ◽  
Kieran McQuinn
Keyword(s):  
Financial Crisis ◽  
Housing Market ◽  
Extended Period ◽  
Market Regulation ◽  
Content Type ◽  
Public Finances ◽  
Financial Market Regulation ◽  
The Public ◽  
Recent Financial Crisis ◽  
Run Up

Purpose The Irish fiscal position was significantly affected by the recent financial crisis. Budgetary surpluses quickly gave way to significant deficits post 2007, culminating into a lengthy excessive deficit procedure and entry into a formal EU/IMF assistance programme in 2010. Much of the deterioration in the public finances was caused by a sharp decline in property-related taxes because the Irish housing market rapidly contracted. In this paper, the authors quantify the extent to which disequilibria in the housing market can affect the tax take, finding significant implications over an extended period. Design/methodology/approach The authors attempt to quantify the extent of housing-related tax windfall gains and losses in Ireland over a 30-year period as a result of disequilibrium in the housing market. This involves a three-step modelling approach where we relate property-dependent taxes to the housing market while estimating equilibrium in the latter before solving for the tax take consistent with that equilibrium. In so doing, the authors find that the fiscal position compatible with equilibrium in the housing market has at times diverged greatly from actual outturns. Findings This paper confirms the significant role played by the housing market in influencing both the tax-take and the overall fiscal position. The authors find that there have been a number of instances where excesses in the housing market have spilled over into fiscal aggregates, notably in the housing bubble period between 2003 and 2008. However, with the on-going adjustments in the housing market, it would appear that prices and volumes have overcorrected in recent years. Overall, much greater emphasis should be given to the role of the housing market in forecasting key taxation aggregates. Originality/value The recent crisis highlighted how domestic policy mistakes (both in terms of budgetary planning and financial market regulation) can greatly amplify economic shocks. Irish budgetary policy in the run up to the financial crisis of 2008/2009 was clearly based on unsustainable levels of housing-related tax receipts. This paper highlights the need for a much more granular approach in framing tax forecasts and in assessing the public finances by more explicitly factoring in housing market developments.

A multifractal detrended fluctuation analysis of housing market: a role of financial crises in developed economies

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Syed Ali Raza ◽  
Nida Shah ◽  
Muhammad Tahir Suleman ◽  
Md Al Mamun
Keyword(s):  
Financial Crisis ◽  
Housing Market ◽  
Market Efficiency ◽  
House Price ◽  
Fluctuation Analysis ◽  
Content Type ◽  
Multifractal Detrended Fluctuation Analysis ◽  
Long Run ◽  
Before And After

Purpose This study aims to examine the house price fluctuations in G7 countries by using the multifractal detrended fluctuation analysis (MF-DFA) for the years 1970–2019. The study examined the market efficiency between the short-term and long-term in the full sample period, before and after the global financial crisis period. Design/methodology/approach This study uses the MF-DFA to analyze house price fluctuations. Findings The findings confirmed that the housing market series are multifractal. Furthermore, all the markets showed long-term persistence in both the short and long-term. The USA is identified as the most persistent house market in the short run and Japan in the long run. Moreover, in terms of efficiency, Canada is identified as the most efficient house market in the long run and the UK in the short run. Finally, the result of before and after the financial crisis period is consistent with the full sample result. Originality/value The contribution of this study in the literature is fourfold. This is the first study that has examined the house prices efficiency by using the MF-DFA technique given by Kantelhardt et al. (2002). Previously, the house market prices and efficiency has been investigated using generalized Hurst exponent (Liu et al., 2019), Quantile Regression Approach (Chae and Bera, 2019; Tiwari et al., 2019) but no study to the best of the knowledge has been done that has used the MF-DFA technique on the housing market. Second, this is the first study that has focused on the house markets of G7 countries. Third, this study explores the house market efficiency by dividing the market into two periods i.e. before and after the financial crisis. The study strives to investigate if the financial crisis determines the change in the degree of market efficiency or not. Finally, the study gives valuable insights to the investors that will help them in their investment decisions.

Role of Accounting and Audit in the Recent Financial Crisis

2013 ◽  
pp. 91-98
Author(s):  
Alev Dilek Aydin
Keyword(s):  
Financial Crisis ◽  
Global Financial Crisis ◽  
Fair Value ◽  
Financial Reports ◽  
Historical Cost ◽  
The Public ◽  
Creative Accounting ◽  
Recent Financial Crisis ◽  
Audit Reports

This study aims to assess the role of accounting and auditing in the recent financial crisis. After each crisis, there have been serious discussions concerning the reasons behind those crises. However, no consensus has yet been achieved until now. In this context, the analysis of the relationships among financial crisis, accounting, and auditing is of utmost importance in better evaluating the structural reasons behind the crisis. There are several points that this chapter aims to analyze to indicate the contributions of accounting and auditing to the recent global financial crisis. These points are: impacts of disregarding the main principles of accounting, the wide use of fair value accounting over cost-based accounting, incorrect and misleading financial and audit reports, applications of creative accounting, and lack of transparency and weaknesses of the auditing process. The debates generally concentrate on the use of fair value (mark-to-market) accounting in the financial reports as opposed to the historical cost method. It should be emphasized that accounting is very important as a key mechanism of market economies, because of its crucial role in the functioning of the markets in accordance with the public interest. The chapter concludes with several suggestions by taking the fact into consideration that accounting and auditing systems should be revised for the better protection of interests of the third parties such as investors, potential investors, and the state.

The effect of financial crisis on auditor conservatism: US evidence

2015 ◽  
Vol 28 (2) ◽  
pp. 160-171 ◽  
Author(s):  
Joseph Beams ◽  
Yun-Chia Yan
Keyword(s):  
Financial Crisis ◽  
Design Methodology ◽  
Environmental Changes ◽  
Accounting Firms ◽  
Content Type ◽  
Going Concern ◽  
Big 4 ◽  
Distressed Firms ◽  
Recent Financial Crisis ◽  
Auditor Conservatism

Purpose – This paper aims to examine the effect that the recent financial crisis had on auditor conservatism in the form of increased going-concern opinions. Design/methodology/approach – This study uses a sample of US’ distressed firms from 2005 to 2011 to test the change in going-concern opinions issued. This paper uses a logistic regression model to control for other predictors of going-concern opinions to determine when the financial crisis led to an increase in auditor conservatism. Findings – The authors find that auditors became more conservative in the form of issuing higher levels of going-concern opinions even after controlling for other predictors of going-concern opinions. This increased conservatism was present in both Big 4 and non-Big 4 accounting firms. The increased conservatism quickly returned to normal levels when the financial crisis eased. Originality/value – These findings add to the literature on the effects of environmental changes on audit opinions. Additionally, this study finds a difference in the timing of the reaction by large and small accounting firms, but, overall, it finds consistency in that both increased conservatism during the crisis and quickly returned to normal afterward.

Return and co-movement of major public real estate markets during global financial crisis

2017 ◽  
Vol 35 (5) ◽  
pp. 489-508 ◽  
Author(s):  
Kim Hiang Liow ◽  
Shao Yue Angela
Keyword(s):  
Financial Crisis ◽  
Real Estate ◽  
Global Financial Crisis ◽  
Content Type ◽  
Real Estate Markets ◽  
The Public ◽  
Movement Dynamics ◽  
The Usa ◽  
Short Run ◽  
Practical Implications

Purpose The purpose of this paper is to investigate the volatility spectral of five major public real estate markets, namely, the USA, the UK, Japan (JP), Hong Kong (HK), and Singapore (SG), during the pre- and post-global financial crisis (GFC) periods. Design/methodology/approach First, univariate spectral analysis is concerned with discovering price cycles for the respective real estate markets. Second, bivariate cross-spectral analysis seeks to uncover whether any two real estate price series share common cycles with regard to their relative magnitudes and lead-lag patterns of the cyclical variations. Finally, to test the contagion effects, the authors estimate the exact percentage change in co-spectral density (cyclical covariance) due to high frequencies (short run) after the GFC. Findings The authors find that whilst none of the public real estate markets examined are spared from the crisis, the three Asian markets were less severely affected by the GFC and were accompanied by a reversal in volatility increase three years post-global financial crisis. Additionally, the public real estate markets studied have become more cyclically linked in recent years. This is particularly true at longer frequencies. Finally, these increased cyclical co-movements measure the outcomes of contagion and indicate fairly strong contagious effects between the public real estate markets examined due to the crisis. Research limitations/implications The implication of this research is that benefits to investors from international real estate diversification may not be as great during the present time compared to previous periods because national public real estate markets have become more correlated. Nevertheless, the findings do not imply the complete absence of diversification benefits. This is because although cyclical correlations increase in the short run, many of the correlation values are still between low and moderate range, indicating that some diversification benefits may still be realized. Practical implications Given the significant market share and the highest levels of securitization in Asia-Pacific markets including JP, HK/China, and SG, this cyclical research including major public real estate markets has practical implications for ongoing international real estate investment strategies, particularly for the USA/UK and Asian portfolio managers. Originality/value This paper contributes to the limited research on the cyclical return and co-movement dynamics among major public real estate markets during financial/economic crisis in international finance. Moreover, the frequency-domain analysis conducted in this paper adds to better understanding regarding the impact of GFC on the cyclical return volatility and co-movement dynamics of major developed public real estate markets in international investing.

Holding banks to account for the financial crisis?

2015 ◽  
Vol 23 (1) ◽  
pp. 45-69
Author(s):  
Oonagh Anne McDonald
Keyword(s):  
Financial Crisis ◽  
Housing Policy ◽  
Careful Analysis ◽  
Careful Examination ◽  
Department Of Justice ◽  
Content Type ◽  
Federal Housing ◽  
The Usa ◽  
The Government ◽  
Run Up

Purpose – The purpose of this paper is to examine the ways in which the USA has sought to hold the leading banks to account for the financial crisis and to asses the validity of the methods used. This is the first of two articles which looks at the basis of the Complaints against the banks and the settlements which led to the imposition of large fines on the banks. Design/methodology/approach – The paper first provides an account of the government housing policy from 1995 to 2008 and argues that the cases brought against the banks and then at the legal basis of the charges. The methodology consists of a careful examination of the documentary evidence and an analysis of the changes in the relevant laws used by the Department of Justice when bringing charges against the banks. Findings – The paper concludes that both the basis of the cases against the banks and the purpose of large fines are open to question. Research limitations/implications – Much of the information is available. However, as the major cases against the large banks did not go the court, and the basis of the fines is a settlement between the bank and the Department of Justice, each fine is supported by a relatively brief “Statement of the Facts”. The evidence amassed by subpoenas issued by the Department of Justice is not tested in court. Practical implications – Much greater consideration must be given to more effective ways of holding banks and especially senior executives to account. Social implications – The imposition of large fines does not satisfy the public desire to see that justice is done. Such fines imposed on the ban are not likely to change bank behaviour. Originality/value – Its originality lies in setting out an account of government housing policy and its role in the run-up to the financial crisis. No one has carried out a careful analysis of the cases against the large banks brought by the Department of Justice and, in the second article, by the Federal Housing Finance Agency.

Serbian government faces hurdles at home and abroad

2016 ◽  
Keyword(s):  
Ethnic Minority ◽  
Structural Reforms ◽  
Election Cycle ◽  
Content Type ◽  
Public Finances ◽  
The Public ◽  
Breathing Space ◽  
At Home

Subject The new government sworn in on August 11. Significance Impressive results in stabilising the public finances have bought significant breathing space, but structural reforms are lagging behind, with most of this year wasted for reforms thanks to the election cycle. Impacts Including the SPS and several ethnic minority parties in the ruling coalition will ensure a two-thirds majority in parliament. Belgrade and Prishtina may be expected to intensify efforts to tie up loose ends left over from the 2013 Brussels agreement. Most crucial of these will be the much-delayed establishment of an association/community of Serb municipalities in Kosovo. Tensions between Nikolic and Vucic will escalate as Vucic seeks to prevent Nikolic from running for a second presidential term.

Israel may be heading for its third election in a year

2019 ◽  
Keyword(s):  
Prime Minister ◽  
Right Wing ◽  
Not Given ◽  
Content Type ◽  
Public Finances ◽  
The Public ◽  
The Government

Significance On October 23, President Reuven Rivlin passed on the task of forming the government to Benny Gantz, leader of the centrist Blue and White alliance, after incumbent Prime Minister Binyamin Netanyahu failed. Neither the centre-left bloc nor the bloc of religious and right-wing parties (led by Netanyahu's Likud) has a majority without Yisrael Beiteinu, but so far Gantz and Netanyahu have failed to find an acceptable compromise despite pressure from Lieberman and Rivlin to form a unity administration. Meanwhile, Netanyahu himself faces an impending indictment on corruption charges. Impacts Consecutive rounds of elections will create a strain on the public finances. Netanyahu will refuse any power rotation deal where he is not given the premiership first. Another election, especially if coupled with an indictment, will accelerate a trend of public fatigue with Netanyahu.

Algeria budget cuts could foster discontent

2016 ◽  
Keyword(s):  
Oil And Gas ◽  
Low Energy ◽  
Living Standards ◽  
Fiscal Deficit ◽  
Energy Prices ◽  
Budget Cuts ◽  
Content Type ◽  
Public Finances ◽  
The Public ◽  
Social Tensions

Significance With low energy prices rapidly diminishing the public finances, the new budget is likely to squeeze living standards further when Algerians are already feeling the pinch. Impacts The 2015 fiscal deficit was 16.5% of GDP and may be little lower in 2016, as oil and gas revenue has continued to be depressed. The government's plans to rein in the fiscal deficit are likely to fall short of creditor expectations. An austerity budget would likely inflame social tensions, so Algiers will avoid presenting the 2017 one as such.

France’s economy will fail to accelerate in 2017

2017 ◽  
Keyword(s):  
Euro Area ◽  
Trade Unions ◽  
Gdp Growth ◽  
Content Type ◽  
Public Finances ◽  
The Public ◽  
Radical Reform ◽  
Economic Outlook

Subject France’s economic outlook for 2017. Significance Since 2014, growth in France has trailed that in the euro-area as a whole. After averaging a mere 0.5% per year in 2012-14, GDP growth recovered in 2015 to 1.3%, but has failed to accelerate. In 2016, GDP expanded by 1.2%, according to official estimates. GDP growth is expected to converge towards the euro-area’s average in 2017, but this is due to the expected slowdown in the euro-area rather than France’s better performance. Impacts The country will look to the new president, elected in May 2017, to reduce unemployment and mend the public finances. Nevertheless, radical reform plans are likely to meet fierce resistance, including from trade unions. Reversing the strong and long-standing erosion of France’s external competitiveness may be difficult.

A relational capital perspective on social sustainability; the case of female entrepreneurship in Italy

2019 ◽  
Vol 24 (1) ◽  
pp. 114-130 ◽  
Author(s):  
Francesca Dal Mas ◽  
Paola Paoloni
Keyword(s):  
Financial Crisis ◽  
Single Case ◽  
New Ventures ◽  
Extended Period ◽  
Political Agenda ◽  
Relational Capital ◽  
Female Entrepreneurship ◽  
Female Entrepreneurs ◽  
Content Type ◽  
Italian Context

Purpose Female entrepreneurship has been part of the political agenda internationally. Public entities should promote entrepreneurship in general, and female entrepreneurship in particular, with dedicated resources and programs. Female entrepreneurs are considered a key asset for developing economic growth. However, women experience much more difficulties than men in opening their own ventures. Relational capital is particularly relevant when it comes to female entrepreneurship. The purpose of this study is to analyze the factors that affect the opening of new ventures and the role of relational capital in female entrepreneurship, taking into consideration the Italian context during the financial crisis. Design/methodology/approach This study uses a mixed-method approach analyzing data from a regional program to enhance the creation of new companies, trying to understand the issues of potential entrepreneurs in general and women in particular. A single case is then investigated using the characteristics – ambience – organization – sustainability model of micro-entrepreneurship and the network relationship model by Paoloni (2011). Findings The analysis highlights how women face much more difficulties in starting new ventures concerning their previous experience if their employment condition finds an extended period of inactivity. Additionally, potential female entrepreneurs are more sensitive to the complexity of the initiative, concerning the required investment and the number of employees, compared to male entrepreneurs. Relational capital is a crucial asset in fostering the success of the venture, especially in the start-up phase. Originality/value The purpose of the study is to contribute to the debate regarding the issues affecting the opening of new companies, as well as the link between relational capital and female enterprises. The paper offers some insights about a program covering a well-sized population during the financial crisis.

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