Article published in La Revue des Sciences de Gestion 2018/1-2 (N° 289-290), pages 77 à 89
This article seeks to investigate whether the fair value accounting may have short-termist bias on the financing of long-term investment. We studied the responses to the consultation on European funding and long-term investment. This study reveals that a majority of respondents consider Fair value accounting as a short-term approach and highlights three negative impacts on long-term activities of banking and non-financial intermediaries (institutional investors): the introduction of more volatility in the financial statements (balance sheet and income statement); short-termist behavior and procyclicality in decision making of investors and managers. It also identifies six different alternatives, including five within the accounting technique including the creation of an accounting category for representing long-term investments by taking into account the horizon of assets holding.
Using an empirical stock-flow consistent (SFC) model for the French economy, we simulate an imported inflationary shock to emulate the current inflation situation and analyze the resulting macroeconomic impacts on the French economy. Two possible responses are considered: increased wage per capita so as to preserve workers’ purchasing power, increased margins by firms in order to restore their...
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