Seminar Public Economics
Financial Crisis, Accounting Rules and Excessive Risk-Taking
Prof. Dr. Johannes Becker und Melanie SteinhoffOutline
The current financial crisis has triggered a lively debate on the peculiar role that accounting rules, applied to banks and global enterprises, have played for the excessive risk-taking and the global downturn. It is often argued that mark-to-market accounting, the so-called fair-value accounting of US American origin, has exacerbated the crisis by encouraging the accumulation of high-risk assets during the last boom. A less debated issue is the influence of the tax system which may also have had some impact, for instance, by imposing tax advantages for debt-financed investments.
In this seminar, we will discuss current research papers that shed light on the issues outlined above. We will focus on (inefficient) investment incentives emanating from different financial accounting regimes, especially the IFRS, US and German GAAP (HGB). Moreover, we will analyze tax effects on investment and risk allocation and their interaction with accounting standards.
Literature
Shackelford, D.; Slemrod, J.; Sallee, J. (2011). Financial Reporting, Tax and Real Decisions: Toward a Unifying Framework, International Tax and Public Finance 18(4): 461-494.
Edgerton, J. (2011). Investment, Accounting and the Salience of the Corporate Income Tax, FEDS Working Paper.
Heaton, J.; Lucas, D.; McDonald, R. (2010). Is Mark-to-Market Accounting destabilizing? Analysis and Implications for Policy, Journal of Monetary Economics 57: 64-75.
Robinson, L.; Sansing, R. (2007). The Effect of "Invisible" Tax Preferences on Investment and Tax Preference Measures, Journal of Accounting and Economics 46: 389-404.
Allen, F.; Carletti, E. (2007). Mark-to-Market Accounting and Liquidity Pricing, Journal of Accounting and Economics 45: 358-378.
Plantin, G.; Haresh, S.; Hyun, S. (2007). Marking-to Market: Panacea or Pandora's Box?, Journal of Accounting Research 46(2): 435-460.
Sinn, H. (2010). Casino Capitalism, Oxford University Press, Chapter 4.
Koo, R. (2009). The Holy Grail of Macroeconomics, John Wiley & Sons, Chapters 3 and 8.
Edgerton, J. (2011). Investment, Accounting and the Salience of the Corporate Income Tax, FEDS Working Paper.
Heaton, J.; Lucas, D.; McDonald, R. (2010). Is Mark-to-Market Accounting destabilizing? Analysis and Implications for Policy, Journal of Monetary Economics 57: 64-75.
Robinson, L.; Sansing, R. (2007). The Effect of "Invisible" Tax Preferences on Investment and Tax Preference Measures, Journal of Accounting and Economics 46: 389-404.
Allen, F.; Carletti, E. (2007). Mark-to-Market Accounting and Liquidity Pricing, Journal of Accounting and Economics 45: 358-378.
Plantin, G.; Haresh, S.; Hyun, S. (2007). Marking-to Market: Panacea or Pandora's Box?, Journal of Accounting Research 46(2): 435-460.
Sinn, H. (2010). Casino Capitalism, Oxford University Press, Chapter 4.
Koo, R. (2009). The Holy Grail of Macroeconomics, John Wiley & Sons, Chapters 3 and 8.
Further Information:
- The seminar takes place on June 15/16, 2012 (two full days).
- Application deadline: April 15, 2012. Please contact G. Musiolik, Tel. 0251-8322871 (12gamu@wiwi.uni-muenster.de).
- Prerequisites for completing the course successfully: Paper (15 pages), presentation and participation in discussion.
- Papers due on May 25, 2012, 12h.
- Language (papers and seminar discussions): English.
Guidelines for seminar presentations
