Social and Economic Studies within the Framework of Emerging Global Developments, Volume -1
Summary
Global Developments” includes empirical and theoretical original chapters written by
researchers from different countries and universities. The target audience of this book
is researchers, students and academics interested in social and economic studies.
Key Takeaways
Table Of Contents
- Cover
- Title
- Copyright
- About the editor
- About the book
- This eBook can be cited
- Foreword (Prof. Dr. M. Veysel Kaya)
- Table of Contents
- List of Contributors
- Conditions of the CM (Cycle of Money) (Constantinos Challoumis)
- The Upstream and Downstream Integration of Global Value Chains in the XXI Century (Susana Vieira, Renato G. Flôres Jr., Maria Paula Fontoura)
- Why Are M-Payment Platforms So Attractive? M-Payment as the Entry Level to the Digital Financial Era (Ida Claudia Panetta, Sabrina Leo)
- European Sanctions Impact on the Energy Sector Stock Prices: The Ukrainian War Effect (Patrycja Chodnicka-Jaworska)
- Digital Technology and Social Capital in the Era of Covid-19 (Margaret Tseng, Anthony D’Andrea)
- The Econometric Analysis of the Relationship Between Economic Growth and Health Services in Türkiye (Ibrahim Aytekin)
- A Fiscal Policy Proposal on the Relationship Between Indirect Taxes and Inflation in Türkiye (Ozkan Zulfuoglu)
- Stock Market Indexes: Are They Sensitive on the Ukrainian War? (Piotr Jaworski)
- Information Systems Governance: Some Dimensions to Management (Almiro de Oliveira, Pedro Fernandes da Anunciação)
- Information Governance: A Framework Proposal for Enterprise Managers (Francisco Joaquim Madeira Esteves, Pedro Fernandes da Anunciação)
- Smart Tourism: The Case of Setúbal and Cartagena (Pedro Fernandes da Anunciação, António Juan Briones Peñalver, Francisco Joaquim Madeira Esteves)
- Influence of Eco-Investment and Innovation on Municipal Waste Recycling in EU (Victor Platon, Andreea Constantinescu, Daniela Antonescu, Simona Frone, Florina Popa)
- Cultural and Art Economics and Administrative Assistance on Institutional Levels from Macroeconomic, Sociopolitical and Philosophical Aspects: Against the Motion (Konrad Gunesch)
- Workplace Environment/Culture and the Challenges of Our Days (Alexandru Trifu)
- Managing Stress for Professional Athletes’ in Sports Organizations (Sonata Staniuliene, Chrysi Miliordou)
- Reflections of 1929 Great Depression to the Cinema: Cinderella Man (2005) by Ron Howard (Kemal Cebeci)
- List of Figures and Graphs
- List of Tables
List of Contributors
Daniela Antonescu
Institute of National Economy, Romanian Academy, Romania
Pedro Fernandes da Anunciação
CICE-ESCE/IPS (Research Centre in Business Sciences) – Polytechnic Institute of Setúbal, Setúbal, Portugal
Ibrahim Aytekin
Bitlis Eren University, Bitlis/Türkiye
Kemal Cebeci
Faculty of Economics, Marmara University, Istanbul, Türkiye
Constantinos Challoumis
National and Kapodistrian University of Athens (N.K.U.A.), Greece
Patrycja Chodnicka-Jaworska
University of Warsaw, Faculty of Management, Warsaw, Poland
Andreea Constantinescu
Institute of National Economy, Romanian Academy, Romania
Anthony D’Andrea
Marymount University, USA
Francisco Joaquim Madeira Esteves
CICE-ESCE/IPS (Research Centre in Business Sciences) – Polytechnic Institute of Setúbal, Setúbal, Portugal
Renato G. Flôres Jr.
FGV IIU and FGV EPGE, Rio de Janeiro, Brazil
Maria Paula Fontoura
ISEG-Lisbon School of Economics and Management, UECE-Research Unit on Complexity and Economics and REM- Research in Economics and Mathematics, Universidade de Lisboa, Portugal←9 | 10→
Simona Frone
Institute of National Economy, Romanian Academy, Romania
Konrad Gunesch
London Centre for Interdisciplinary Research, London, United Kingdom
Piotr Jaworski
University of Warsaw, Faculty of Management, Warsaw, Poland
Sabrina Leo
Sapienza University of Rome, Faculty of Economics, Rome
Chrysi Miliordou
Vytautas Magnus University, Kaunas, Lithuania
Almiro de Oliveira
Vice-President of Information Systems Governance European Club, Porto, Portugal
Ida Claudia Panetta
Sapienza University of Rome, Faculty of Economics, Rome
António Juan Briones Peñalver
Polytechnic University of Cartagena, Cartagena, Spain
Victor Platon
Institute of National Economy, Romanian Academy, Romania
Florina Popa
Institute of National Economy, Romanian Academy, Romania
Sonata Staniuliene
Vytautas Magnus University, Kaunas, Lithuania
Alexandru Trifu
University “Petre Andrei”, Iași, Romania
Margaret Tseng
Marymount University, USA←10 | 11→
Susana Vieira
ISEG-Lisbon School of Economics and Management, Universidade de Lisboa, Portugal
Ozkan Zulfuoglu
Faculty of Economics, Marmara University, Istanbul, Türkiye
Conditions of the CM (Cycle of Money)
1. Introduction
The transition from GDP into CM (Cycle of Money) is responsible for the determination of the structure of the economy. CM comes from the GDP and indicates if an economy has the appropriate structure. The structure of an economy could be identified by the distribution and use/reuse of money. This chapter shows the theoretical background of the theory of the cycle of money, hinged on the Keynesian and Neoclassical concepts. CM is the only theory that achieves control of an economy and identifies its condition, as the velocity of the cycle of money reveals the structure of an economy.
2. Cycle of Money Mathematical Background
Controlled transactions meant transactions between companies of the same interest group that refer indicatively to issues such as tax avoidance, tax evasion, transfer of profits from the business to business, fictitious transactions between them, the pricing policy of cost savings to maximize their profits, the transfer of profits from a business based in a country with unfavorable tax regime to other countries with more favorable, and generally the accounting and financial practices that each company uses in its relation with the other companies to establish a favorable tax environment. Controlled transactions include transfer pricing, triangular transactions, and any form of internal control aimed at achieving profits. A thorough analysis of their operation shows the way they affect the economies of the countries regardless of whether they are established in them or not. The current work also deals with concepts such as the cycle of money, the velocity of money, and the velocity of escaped savings, in each economy. The cycle of money refers to the difference between the rate of the volume of transactions carried out in an economy and the volume of transactions that escaped outside that economy, . The velocity of money (liquidity) expresses the inflation or deceleration of the volume of transactions within an economy, . The velocity of escaped savings indicates the volume of ←13 | 14→transactions that go beyond an economy, (Challoumis, 2021a, 2021b, 2021c, 2021d, 2021e).
Therefore, the velocity of money refers to the first-order differential equation of the state of an economy, i.e. in quantitative terms, GDP, with the volume of transactions in that economy. The velocity of escaped savings refers to a first-order differential equation of the state of an economy, i.e. in quantitative terms, GDP and the volume of money that goes beyond it. The difference between the velocity of money and the velocity of escaped savings constitutes the cycle of money. A relevant concept bibliographically can be found in M. Friedman’s monetarist approach, in the sense that M expresses the supply of money and V the cash flow. Thus, to make the existing framework easier to understand, the M of monetarist theory concerns in this case m, with the difference that M refers to the amount of money on offer, while m refers to the existing money of the economy without the need to implement a monetary policy. As far as the cash flow, V, of the monetarist theory concerns the cash flow which is expressed, in this case, with the velocity of money. Therefore, according to the above, an approximation of the theoretical framework of the money cycle is expressed in quantitative terms through partial differential equations, . and - , where S means savings, I is investments, and X is about exports. S’ is savings that go beyond the economy, i.e. saved abroad, I’ is money raised from the economy and invested in other economies, and M is imports. So, . The reason that used S=C is because in the CM (Cycle of Money) S*=I, then Stot.=S+S*=C+I, as any amount of money not used in the economy is considered as savings. With S being the supporting savings and S' (=C'), then, Stot.' = S'+S*'= C'+I' is the escaped savings. Thus, it is considered that the concept of the cycle of money is directly linked to consumption, and investments, when they do not take active place by consumption or investments. For example, albeit in quantitative terms that m = S + I + X, with S = C, S = 50m, I = 10m, X = 20m and = (S-S’) + (I-I’) + (X-M), where S’ are the savings that are lost from the economy due to controlled transactions. By analogy, I’ also refers to money that is lost and is not invested in the state from which these sums of money were drawn, but are directed to ←14 | 15→other economies. X is about exports and M is about imports. Essentially what has been done here is the breakdown of GDP in individual terms, in the light of amounts lost due to controlled transactions. So the result of this numerical example is
For example, regarding escaped savings, suppose α = S’ + Ι’ + Χ, με S’ = C’, S’ = 20α, I’ = 10α, X = 30α and = (S-S’) + (I-I’) + (X-M), where . So, in this example, the money cycle is, . Therefore, the second partial differential equation of the first order concerns the amount that is lost from the economy. However, to be able to carry out a comparative study of the inputs and outputs in tax havens and offshore banks, it is necessary to have comprehensive supervision of the amounts of money moving, but this is not possible in the current circumstances. They are not recorded in any official body, because they are hidden amounts. Indicators are used to enable the formulation of an economic policy. The problem with money and controlled transactions, in general, is that there are no records of official financial data. In other words, through the money that goes beyond an economy, both controlled transactions and a broader tax policy can be approached.
3. Fixed Length Principle
Based on this reasoning, controlled transactions are also achieved, with the inability to record the exact amount to be taxed. Thus, the theory of the money cycle has provided for the application of a minimum tax, through the so-called Fixed Length Principle, to cover de facto the economic loss from controlled transactions. In this way, controlled transactions become manageable within the framework of the existing theory. In this way, the formulation of economic and fiscal policy was defined. The correctness of the theory of the money cycle is reflected in the G7 decision, as the application of a minimum fixed tax in the countries, in this case, is 15 %, but in the future, it must be made larger to completely remove the controlled transactions. The theory of the cycle of money (money cycle) analyzes the dynamics of each economy to maximize the well-being of its population. It is about maximizing prosperity in the economy in the conduct of public economic policies, both from the point of view of the country and from the point of view of businesses that carry out controlled transactions, and also of other economic units that do not engage in these practices (Bergquist, Mildenberger, & Stokes, 2020; Goldsztejn, Schwartzman, & Nehorai, 2020; ←15 | 16→GVELESIANI, 2019; Kamradt-Scott & McInnes, 2012; Sultana, Or Rashid, Akter Eva, & Sultana, 2020; Ustinovich & Kulikov, 2020).
The present work, however, proceeds to the issues of economic policy. It should be noted that ultimately a theoretical framework is given to maximize the benefits to the economy. The gap in the existing literature covered by this work concerns the study of economic models in the light of the use of money in a fragmented economy. It is a fragmented and not closed economy, as this economy is in interaction with other economies, but presents some elements of protectionism and economic elements that make it perceived as a unity that is in interaction with other economies. A “fragmented economy” is called an economy that while it is in interaction with other economies, nevertheless has elements that make it a distinct economic unity. This distinction allows us to investigate the use of money in an economy that has specific liquidity available. This means that using a certain amount of money available, in a certain time frame, it is allowed to determine the frequency of the use of money in an economy. The concept of frequency expresses the rate of increase or decrease in the volume of transactions.
The use of a given amount of money in a specific time frame, without losing this amount of money to the economy, highlights the correctness of the structure of this economy. Structure of the economy is expressed by the money cycle, as an economy with a large volume of transactions and a large dispersion of money between as many businesses and households as possible that indicates it has a good distribution of financial resources throughout the economy.
Details
- Pages
- 256
- Publication Year
- 2022
- ISBN (PDF)
- 9783631883501
- ISBN (ePUB)
- 9783631883518
- ISBN (MOBI)
- 9783631883525
- ISBN (Softcover)
- 9783631881132
- DOI
- 10.3726/b19907
- Language
- English
- Publication date
- 2022 (August)
- Published
- Berlin, Bern, Bruxelles, New York, Oxford, Warszawa, Wien, 2022. 256 pp., 25 fig. b/w, 27 tables.
