Earnings Management Using the Valuation Allowance for Deferred Tax Assets under SFAS No. 109*

Statement of Financial Accounting Standards No. 109 (SFAS No. 109) allows firms to use their discretion to set arbitrarily high valuation allowances against deferred tax assets. Firms can then later use these "hidden reserves" to manage earnings. Our evidence indicates that most banks do not record a valuation allowance to manage earnings, but rather to follow the guidelines of SFAS No. 109. However, if the bank is sufficiently well capitalized to absorb the current‐period impact on capital, then the amount of the valuation allowance increases with a bank's capital. In later years, bank managers adjust the valuation allowance to smooth earnings. The magnitude of the discretionary adjustment increases with the deviation of unadjusted earnings from the forecast or historical earnings.     

Market Organization and Propagation of Shocks: The Furniture Industry in Germany and Italy

In this paper we study the furniture industry in two European countries, Germany and Italy. Although the two industries are characterized by very similar output and technology, they differ widely in terms of market organization, most notably the distribution of firms by size, and the organization of retail. We find some evidences that these differences have an influence on the dynamic behavior of industry output, prices and exports in the two countries.     

The European Community Household Panel: A review

The European Community Household Panel (ECHP) is a standardized multi-purpose annual longitudinal survey carried out at the level of the European Union. It is centrally designed and coordinated by the Statistical Office of the European Communities (Eurostat), and covers demographics, labor force behavior, income, health, education and training, housing, migration, etc. After reviewing the organization of the survey, this paper discusses some of the issues that an applied economist potentially interested in the ECHP may face when trying to deal with these data. In particular, the paper focuses on survey attrition and nonresponse, the weighting procedures with which Eurostat tries to compensate for differential nonresponse and attrition rates, and the imputation methods adopted by Eurostat in order to deal with item nonresponse. First version received: July 2000/Final version received: October 2000     

Hungary

Statistical Annex

Hungary     

DELAYED RESPONSE TO SHOCKS IN THE NEO-AUSTRIAN MODEL: CHARACTERISTICS OF THE TRAVERSE PATH

We analyse the traverse path following either the introduction of a more profitable production technique or a rise in the wage rate on the assumption that investment depends, with a time lag, on the activity level of the economic system. We compare this case with the previously studied cases of an immediate reaction and, the opposite situation, an absence of reaction. We conclude by examining the case in which only some entrepreneurs are innovators.     

Firm Size and Market Power in Carbonated Soft Drinks

Sutton (1998) offers us a simple way to model firm size distributions across differentiated products industries. We analyse the implications of this approach for company markups using a structural model for a specific industry. We incorporate the complexities of multi-product (brand) companies operating with different (strategic) configurations of product characteristics and stores to estimate brand markups, using Irish AC Nielsen retail data for Carbonated Soft Drinks. As a second step we estimate that market power does not increase in companies with higher market share, controlling for other factors. This challenges a traditional mind-set.     

Towards monetary constitutionalism in Italy

Various facts which belong to the past, present, and future of Italy, which concern both politics and economics, and which are relevant within a broad discussion of monetary policy support the request for a constitutionalization of the target of monetary stability. The authors are grateful to James M. Buchanan for his encouragement in carrying out the research and to an anonymous referee of this journal for his helpful comments on an earlier version of the paper.     

A Model of Employment in the Arts

The behaviour of artists appears to be influenced by non-pecuniary benefits that lead to employment choices inconsistent with traditional expectations of labour supply theory. The paper develops a model of employment in the arts with similarities to the Harris-Todaro model. Seemingly paradoxical results arise. For example, the model illustrates how an increase in wage rates for non-artistic activity may lead to a reduction in the amount of non-artistic activity and a commensurate increase in the amount of time devoted to artistic endeavours. Additionally, the model illustrates how individual work preferences of artists can lead to substantial underemployment in the arts.     

精益维修

企业管理要想达到世界级水平,必须实施精益维修。本文介绍了精益思想的原理,精益生产的组成,精益维修的目的、结构及其维修业绩评价系统。