IDEAS home Printed from https://ideas.repec.org/a/bla/ecorec/v58y1982i4p357-366.html
   My bibliography  Save this article

Inflation and Profits — The SVA and Depreciation Adjustments in the National Accounts

Author

Listed:
  • BRYAN HAIG

Abstract

This paper argues that the figures of profits contained in the national accounts are inappropriate in assessing the performance of industry. The error lies in deducting amounts for stock valuation adjustment from recorded profits. There is a discussion of the arguments usually proposed by national accountants for the deduction and it is concluded that these arguments are invalid. A suggestion is made that the amount of the stock valuation adjustment should be regarded as reflecting the delay in passing on costs of production, and this should be recorded in the national accounts as a timing difference between estimates of national expenditure (which exclude the stock valuation adjustment) and national product (where profits include the stock valuation adjustment).

Suggested Citation

  • Bryan Haig, 1982. "Inflation and Profits — The SVA and Depreciation Adjustments in the National Accounts," The Economic Record, The Economic Society of Australia, vol. 58(4), pages 357-366, December.
    • Handle: RePEc:bla:ecorec:v:58:y:1982:i:4:p:357-366
    DOI: 10.1111/j.1475-4932.1982.tb00386.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1475-4932.1982.tb00386.x
    Download Restriction: no
    File URL: https://libkey.io/10.1111/j.1475-4932.1982.tb00386.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Aaron, Henry J, 1976. "Inflation and the Income Tax," American Economic Review, American Economic Association, vol. 66(2), pages 193-199, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Z. P. Matolcsy, 1984. "The Micro Effects of Inflation on Corporate Taxation and Profitability: Some Empirical Evidence for Seventeen Industry Groups," The Economic Record, The Economic Society of Australia, vol. 60(4), pages 356-365, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Martin Feldstein, 1979. "Adjusting Depreciation in an Inflationary Economy: Indexing versus Acceleration," NBER Working Papers 0395, National Bureau of Economic Research, Inc.
    2. Lawrence H. Summers, 1981. "Inflation and the Valuation of Corporate Equities," NBER Working Papers 0824, National Bureau of Economic Research, Inc.
    3. Stanley Fischer & Franco Modigliani, 1978. "Towards an understanding of the real effects and costs of inflation," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 114(4), pages 810-833, December.
    4. Immervoll, Herwig, 2004. "Falling up the stairs: an exploration of the effects of ‘bracket creep’ on household incomes," EUROMOD Working Papers EM3/04, EUROMOD at the Institute for Social and Economic Research.
    5. Chang Woon Nam & Doina Radulescu & Doina Maria Radulescu, 2004. "Does Debt Maturity Matter for Investment Decisions?," CESifo Working Paper Series 1124, CESifo.
    6. Adnan Abdulaziz Shahir & Francesco Figari, 2021. "The effect of fiscal drag on income distribution and work incentives: A microsimulation analysis on selected African countries," WIDER Working Paper Series wp-2021-167, World Institute for Development Economic Research (UNU-WIDER).
    7. Levy, Horacio & Nogueira, José Ricardo & Siqueira, Rozane Bezerra & Immervoll, Herwig & O'Donoghue, Cathal, 2010. "Simulating the impact of inflation on the progressivity of personal income tax in Brazil," Revista Brasileira de Economia - RBE, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil), vol. 64(4), December.
    8. Chang Woon Nam & Christoph Zeiner, 2015. "Effects of Bracket Creep and Tax Reform on Average Personal Income Tax Burden in Germany," CESifo Working Paper Series 5626, CESifo.
    9. Immervoll, Herwig, 2000. "The impact of inflation on income tax and social insurance contributions in Europe," EUROMOD Working Papers EM2/00, EUROMOD at the Institute for Social and Economic Research.
    10. Philip Mirowski & Arthur R. Schwartz, 1982. "The Falling Share of Corporate Taxation," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 5(2), pages 245-256, December.
    11. Charles T. Clotfelter, 1984. "Tax Cut Meets Bracket Creep: the Rise and Fall of Marginal Tax Rates, 1964-1984," Public Finance Review, , vol. 12(2), pages 131-152, April.
    12. Herwig Immervoll, 2006. "Fiscal Drag – An Automatic Stabiliser?," Research in Labor Economics, in: Micro-Simulation in Action, pages 141-163, Emerald Group Publishing Limited.
    13. Louis Kaplow, 1995. "Regional Cost-of-Living Adjustments in Tax-Transfer Schemes," NBER Working Papers 5008, National Bureau of Economic Research, Inc.
    14. Chang Woon Nam & Doina Radulescu, 2003. "Effects of Tax Depreciation Rules on Firms' Investment Decisions: A Comparison of European Transition Countries," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 1(2), pages 52-55, 02.
    15. Brazell, David W. & Mackie, James B. III, 2000. "Depreciation Lives and Methods: Current Issues in the U.S. Capital Cost Recovery System," National Tax Journal, National Tax Association, vol. 53(n. 3), pages 531-62, September.
    16. Feenberg, Daniel R. & Rosen, Harvey S., 1988. "Promises, Promises: The States' Experience With Income Tax Indexing," National Tax Journal, National Tax Association;National Tax Journal, vol. 41(4), pages 525-542, December.
    17. Brazell, David W. & Mackie, James B. III, 2000. "Depreciation Lives and Methods: Current Issues in the U.S. Capital Cost Recovery System," National Tax Journal, National Tax Association;National Tax Journal, vol. 53(3), pages 531-562, September.
    18. David E. Altig & Charles T. Carlstrom, 1990. "Inflation and the personal tax code: assessing indexation," Working Papers (Old Series) 9006, Federal Reserve Bank of Cleveland.
    19. Walter A. Varvel & John R. Walter, 1978. "LIFO inventory accounting : effects on corporate profits, inventory-sales ratios, and inventory investment," Economic Review, Federal Reserve Bank of Richmond, vol. 64(Jul), pages 18-27.
    20. Auerbach, Alan J, 1979. "Inflation and the Choice of Asset Life," Journal of Political Economy, University of Chicago Press, vol. 87(3), pages 621-638, June.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:ecorec:v:58:y:1982:i:4:p:357-366. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/esausea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.