“Inflation Accounting” für Österreich

Summary Profit data which are derived from historical cost accounting (which is the dominant accounting method in most countries) are biassed upward when inflation occurs. The reasons for this bias are based on the concept of capital maintenance (in whichever variation) which pervades accounting standards and hold that the surplus of revenue over (historical) cost has to be split into two parts: One has to be set aside by the firms in order to assure reproduction at the previous period's level (going concern assumption) (=fictitious profit) and only the rest is actual profit which can be used for distribution, debt retirement, net investment, tax payments, etc.In this study various capital maintenance concepts are related to the corresponding profit concepts and thus to the corresponding inflation accounting methods. Which profit concept is use depends on what the concept is supposed to measure. A large part of the (very heated) discussion on inflation accounting methods is shown to be due to a confusion about which profit concept is supposed to result from the calculations.This study uses Austrian industry corporation accounts to present various accounting methods and profit concepts with and without inflation accounting. The dominant profit concept in this study attempts to measure thesocial return to total investment. Thus accounting data are adjusted to eliminate inflationary effects in fixed capital, inventories and net monetary capital. The resulting real profit rates show a significant downward trend over the last twenty years, but remain positive even during the recession of 1974/75. When contrasted with a real capital market interest rate, industry profit rates exhibit a significantly better performance.     

Wirtschaftstheoretiker und Wirtschaftsprognose

Ohne Zusammenfassung     

The origins of meso economics

The paper starts from Schumpeter’s proposition that entrepreneurs carry out innovations (the micro level), that swarms of followers imitate them (meso) and that, as a consequence, ‘creative destruction’ leads to economic development ‘from within’ (macro). It is argued that Schumpeter’s approach can be developed into a new—more general—micro-meso-macro framework in economics. Center stage is meso. Its essential characteristic is bimodality, meaning that one idea (the generic rule) can be physically actualized by many agents (a population). Ideas can relate to others, and, in this way, meso constitutes a structure component of a ‘deep’ invisible macro structure. Equally, the rule actualization process unfolds over time—modelled in the paper as a meso trajectory with three phases of rule origination, selective adoption and retention—and here meso represents a process component of a visible ‘surface’ structure. The macro measure with a view to the appropriateness of meso components is generic correspondence. At the level of ideas, its measure is order; at that of actual relative adoption frequencies, it is generic equilibrium. Economic development occurs at the deep level as transition from one generic rule to another, inducing a change of order, and, at the surface level, as the new rule is adopted, destroying an old equilibrium and establishing a new one.     

Neural network detection of management fraud using published financial data

This paper uses a Artificial Neural Network (AutoNet) to develop a model for detecting management fraud. The study offers an in-depth examination of important publicly available predictors of fraudulent financial statements. We find a model with a high probability of detecting fraudulent financial statements on one sample. The study reinforces the validity and efficiency of AutoNet as a research tool and provides additional empirical evidence regarding the merits of suggested red flags for fraudulent financial statements. © 1998 John Wiley & Sons, Ltd.     

Determinants of heterogeneity in European credit ratings

In this study, we empirically analyze the determinants of heterogeneity in rating assessments across different segments of the European loan market. We conduct a benchmarking analysis using rating information on European corporate obligors from nine major Austrian banks that have a large share of foreign lending, particularly in the Central and Eastern European region. We provide evidence that, generally, overall heterogeneity among rating outcomes for foreign markets is higher than for domestic markets. Furthermore, we show that heterogeneity increases in transition economies and those markets where Austrian bank involvement is relatively low. Our evidence supports the hypothesis that heterogeneity in the assessment of credit risk is determined not only by the objective quality of information, which is deemed to be lower in transition economies, but also by the subjective access to information about obligors measured by the level of domestic bank involvement in the respective foreign market. Furthermore, we quantify potential effects on regulatory capital requirements.     

Ideenwettbewerbe als innovatives Markenbindungsinstrument

Onlinebasierte Ideenwettbewerbe mit Web 2.0-Funktionalit?ten bieten neue innovative M?glichkeiten im Online Marketing. Sie tragen dazu bei, die Bekanntheit und positive Wahrnehmung einer Marke in der ?ffentlichkeit zu st?rken. Konsumenten setzen sich intensiver mit einer Marke auseinander, was schlie?lich zu einer st?rkeren Identifikation mit der Marke und Bindung führt. Auch Swarovski, dem Kristall-Weltmarktführer, gelang durch diese Einbindung von Konsumenten der Erfolg.     

Differences Between Management Philosophies Among American and Chinese Hotel Managers: A Cultural Comparison Between Las Vegas and Shanghai

The aim of this study is to ascertain, in an international tourism context, whether there are cultural discrepancies between hotel employees who have been educated and trained in a host country, and guests who have traveled to that country, given that each group is imbued with their own national culture. The findings indicate that not only do Thai frontline hotel employees have different expectations about the behavior of Japanese and Korean customers, but that the expectations of both customer groups concerning their own behavior differ from those of Thai employees. A significant gap was found in perceptions of actual behavior between the international customers and hotel staff, suggesting that cultural discrepancies are indeed present, but also vary by ethnicity. The scale of the discrepancy between Thai employees’ perceptions of Japanese tourists’ behavior, for example, was larger than in the case of the Korean customers. Comparison of the expectations of the two international customer groups also revealed strong differences.     

Housing,mortgage bailout guarantees and the macro economy

What are the macroeconomic and distributional effects of government bailout guarantees for Government Sponsored Enterprises (e.g., Fannie Mae)? A model with heterogeneous, infinitely lived households and competitive housing and mortgage markets is constructed to evaluate this question. Households can default on their mortgages via foreclosure. The bailout guarantee is a tax-financed mortgage interest rate subsidy. Eliminating this subsidy leads to a large decline in mortgage origination and increases aggregate welfare by 0.5% in consumption equivalent variation, but has little effect on foreclosure rates and housing investment. The interest rate subsidy is a regressive policy: it hurts low-income and low-asset households.     

A Conversation with Kurt Rothschild

Kurt Rothschild was born in Vienna in 1914. In 1938 he came to Glasgow as a refugee from the Nazis, and taught there until his return to Austria in 1947. Between 1947 and 1966 he was a researcher at the Austrian Economic Research Institute in Vienna (WIFO), specialising in labour market and trade issues; he still works for WIFO as a consultant. From 1966 until 1985 he was Professor of Economics at the University of Linz. Two volumes of his collected papers appeared in the 1990s (Rothschild, 1993, 1995). His recent publications include Rothschild (2004a, 2004b, 2006, 2007a, 2007b). This interview took place in Vienna on 1 November 2007.     

Neoliberalism,EU and the Evaluation of Policies

Changes in GDP growth, unemployment and inflation are utilized as indicators of the transition of nineteen OECD countries from Keynesian to neoliberal policies in the period 1960 to 2007. The paper then shows how evaluations of this change and of the success of the European Union can vary depending on the value basis of the observer.