VAT experience as an influence on banking crises

How do income inequality and fiscal consolidation impact on banking crises? A post-Keynesian view

“…In addition, there are, at least, two main reasons for supporting this hypothesis. First, some authors have highlighted the importance of the expansion of credit on banking crises (Taylor, 2009;Peña, 2017b) or the importance of tax policy (Peña, 2020). Nonetheless, fiscal consolidation and credit expansions are correlated (so, in the proposed econometric model, the latter variable will not appear), as Ağca and Igan (2019) show: higher fiscal consolidation turns into a cost of credit, overall for small businesses.…”

The key role of quoted spreads in financial services and transactions

“…In this paper, financial institutions are not mere barter institutions as Intermediary Loanable Fund (ILF) models can show (Kumhof and Zoltan, 2015), but they can be considered sometimes as traders who earn a fee by their job. This job can lead to positive profits, as we will see (Peña, 2020a), but it does not need from real resources (Peña, 2019 andJakab and, it is only the provision of a service that provides the satisfaction of some consumers' needs (safety, liquid availability, better information, etc. ).…”

“…1) considers the financial accounts, concretely the profits and losses statement, of banks, which permits using accountant identities for every casuistic in banking. So, the value added obtained by the "indirect method" and used in VAT, IR-IP, can also be obtained by the direct method, mainly as the sum of non-zero profits and wages and salaries (Peña, 2020a).…”