The content of accounting standards: Principles versus rules

The Global Accounting Alliance has raised a call for different perspectives on principles-based accounting standards. Based on prior studies this paper identifies a number of characteristics of principles-based accounting standards. It uses content analysis to empirically test whether the asserted characteristics are consistent with the IASB and FASB standards on interest costs. We find that rules-based standards, relative to principles-based standards, have more rules, more justification, acknowledge less judgement is required, have more bright-line thresholds, have more scope exceptions, and are more verbose and complex. The main drafting difference between a rules-based or principles-based approach is whether extensional definitions or intensional definitions are used. Several policy implications are noted.     

Globalization beyond partitioning: back to Krugman’s world

In an ultra-globalized industry, all existing firms service all markets (beyond partitioning and back to Krugman’s world). Moreover, intense competition may force firms with low productivity to compensate for losses at the home market with profits made on foreign markets. This raises the question: are there still gains from further trade liberalization in such a situation? We present a simple and tractable heterogeneous firms specification to address this question. The answer we find is this: yes, even more.     

CO2-Einsparpotenziale des Energieträgers Erdgas

Given the governmental climate targets, the question arises how these targets can be achieved without affecting a secure and cheap energy supply. As natural gas causes less carbon emissions than any other fossil fuel it might be able to make a contribution in this regard. Currently, in the generation of heat and power natural gas plays a significant role, which will further increase in the future. Using several scenarios, we predict the development of the importance of natural gas and the consequences for carbon emissions. The calculations show that the share of natural gas for the supply of heat will increase from 46 % to 56 %. Efficiency increases together with changes in the structure of power generation can reduce heating-related carbon emissions by 8.3 % until 2020. For power generation, we calculate alternative scenarios. If the current structure of power generation is held constant, carbon emissions will increase by 0.8 % p.a. If instead natural gas completely replaces coal and lignite, the carbon emissions will be reduced by 1.9 % per year.     

Passierte Kost im Pflegeheim

Essen ist Lebensqualit?t – Die Mahlzeiten im Pflegeheim bieten den Bewohnern neben der blo?en Ern?hrung auch Geselligkeit und Tagesstrukturierung. Doch nicht jeder profitiert davon. So führen Krankheiten wie Demenz oder Apoplexie unter Umst?nden zu Kau- und Schluckbeschwerden. Passierte Kost ist eine M?glichkeit, die Ern?hrungssituation dieser Bewohner zu verbessern.     

Will continuing liberalisation in the EC lead to instability in the EMS?

The liberalisation of capital movements and the creation of a market without internal frontiers within the European Community have far-reaching consequences for the European Monetary System. Sr. Wolfgang Schröder analyses the opportunities and risks associated with these developments.     

On the redistributive effects of Germany’s feed-in tariff

This article assesses the redistributive effects of a key element of German climate policy, the promotion of renewables in the electricity generation mix through the provision of a feed-in tariff. The tariff shapes the distribution of households’ disposable incomes by charging a levy that is proportional to household electricity consumption and by transferring financial resources to households who are feeding green electricity into the public grid. Our study builds on representative household survey data, providing information on various socio-demographics, household electricity consumption, and ownership of photovoltaic facilities. The redistributive effects of the feed-in tariff are evaluated by means of inequality indices. All the indices indicate that Germany’s feed-in tariff is regressive.     

Reductions in Real versus Tariff Barriers: The Impact on Industry Concentration

Economic integration has had ambiguous effects on industry concentration. The literature on the topic proposes various explanations for these empirical findings. This paper provides an additional theoretical argument. It shows that in a world of monopolistic competition, integration alone (modeled as a reduction of trade barriers) may exert opposing forces on industry concentration, depending on whether the barrier consists of real (frictional) or tariff costs. In particular, the Herfindahl index of industry concentration falls for a reduction in real costs, but rises for a reduction in tariff costs. The reason is that real barriers burn up resources, such that industry profitability is reduced, reducing entry, and resulting in fewer firms and a correspondingly higher concentration. Under a tariff barrier, the redistributed tariff revenue stabilizes industry profitability, resulting in more firms and a lower concentration.