Depreciation

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Mthuli Ncube - One of the best experts on this subject based on the ideXlab platform.

  • asymmetrical real exchange rate risk effects on south african and us exports growth
    2017
    Co-Authors: Eliphas Ndou, Mthuli Ncube, Nombulelo Gumata
    Abstract:

    This chapter shows that the real exchange rate Depreciation shocks have a positive effect of increasing exports consistent with theoretical predictions. However, the negative impact of the exchange rate risk tends to partially or completely offset these positive effects thus can ultimately even ultimately reduce exports. Evidence indicates that real exchange Depreciation shocks have a greater effect on future real exchange rate volatility than the real exchange rate appreciation shocks of the same magnitude. We investigated the asymmetric exchange rate volatility effects on exports during appreciations and Depreciations. We did not find strong support for the asymmetry exchange rate risk hypothesis. But the results under asymmetric models suggest that exporters are sensitive to appreciations compared to Depreciations. The results show that the exchange rate risk reduces the impact of the exchange rate Depreciation on exports growth by an estimated 34 percent. However, this is a smaller offsetting impact which neutralises the stimulating effects of the exchange rate on exports growth compared to when this risk impact is modelled to depend on exchange rate appreciation state. The policy implication is that the exchange rate risk effects seem to be larger in the presence of exchange rate appreciations. Moreover, there is no evidence to support the asymmetric hedging behaviour hypothesis consistent with the alternative explanation that exporters respond more to appreciations than to Depreciations.

  • real exchange rate Depreciation shock and real investment growth the balance sheet channel
    2017
    Co-Authors: Eliphas Ndou, Mthuli Ncube, Nombulelo Gumata
    Abstract:

    This chapter continues on the exploration of the effects of the real exchange (REER) changes on economic activity. The massive Depreciation of the REER since 2011 has spurred neither growth nor exports; hence, we search for evidence whether the real exchange rate Depreciation as a measure of competitiveness is the key channel to boost growth via the exports channel. Can the failure of the real exchange rate Depreciation shock to stimulate economic growth via the exports channel reflect the dominance of its contractionary effects via real investment growth channel? Evidence in this chapter shows that the beneficial effect of real and nominal Depreciation via the exports may be neutralised by the contractionary effects of real Depreciation on investment and economic growth. The results further show that investment declines more due to large shocks relative to small exchange rate Depreciation shocks. This suggests that investment responds asymmetrically to real rand Depreciation shocks. This means that policymakers have to place urgency and more weight on efforts to identify the exchange policy and strategy of dealing with the adverse effects of severe deprecation shocks on investment and economic growth. The exchange rate policy has a direct bearing on both mandates of monetary policy makers. In addition, the exchange rate policy and strategy impact the objectives of the National Development Plan and macroeconomic policy to the extent they prize investment lead growth above exports lead growth. When confronted by the large Depreciation in the exchange rate, policymakers need to understand the role of the balance sheet channel and the contractionary effects of large Depreciations of investment and growth. These effects far outweigh those of competitiveness and exports growth. The results suggest that the balance sheet channel is a drag on investment following the Depreciation shock. Implied in this finding is a serious re-assessment of the exchange rate policy.

  • rand Depreciation and investment dynamics the role of imported intermediate inputs
    2017
    Co-Authors: Eliphas Ndou, Mthuli Ncube, Nombulelo Gumata
    Abstract:

    This chapter examines the extent to which the exchange rate Depreciation impacts growth in investment and whether it is impacted by intermediate imports. Evidence shows that the exchange rate Depreciation shock lowers growth in investment significantly while intermediate imports rise. The persistence of exchange Depreciation shocks matters for growth in intermediate imports. In addition, investment and GDP growth decline more in response to persistently rising NEER Depreciation shock than to a non-persistent shock. Thus, evidence shows that increase in intermediate imports costs contributes to the decline in investment and this is a drag economic growth. A counterfactual analysis shows that the NEER Depreciation shock leads to a decline in investment, which is much larger in the presence of intermediate imports than when these are shutoff in the model. This evidence shows that growth in the intermediate imports amplifies the responses of investment following a NEER Depreciation shock.

  • exchange rate Depreciation shocks and redistribution of income the marginal propensity to consume channel
    2017
    Co-Authors: Eliphas Ndou, Mthuli Ncube, Nombulelo Gumata
    Abstract:

    Is there evidence that the exchange rate Depreciation shocks lead to the redistribution of income from workers to producers’ profits? In addition, to what extent do consumer price inflation and exchange rate volatility channels transmit exchange rate Depreciation shocks to marginal propensity to consume? Evidence shows that the NEER Depreciation shock has contractionary effects on economic growth. This is more so due to the income redistribution effects from workers to producers. The effects are propagated via the inflation channel. The presence of inflation following the NEER Depreciation shocks exacerbates the decline in wages. This is in contrast to the magnifying effect of the NEER Depreciation shock that raises gross operating surpluses. This suggests that the NEER Depreciation redistributes the incomes from workers to producers, and the effects are magnified by inflation levels. Furthermore, price stability matters and a low inflation is ideal. The time varying marginal propensity to consume declines but the contraction is larger due to persistently rising exchange rate Depreciation shock than a less persistent shock. In addition, the persistently rising exchange rate Depreciation shock leads to a large increase in the Gini coefficient than a less persistent shock. This evidence shows the redistribution of income effects has implications for the time varying marginal propensity to consume and Gini coefficient. Moreover, the time varying marginal propensity to consume declines more in the presence of overall and permanent exchange rate volatility channels than when these are shutoff in the model. This evidence corroborates the findings that the time varying marginal propensity to consume is impacted by the elevated inflationary pressures and the accompanying exchange rate volatility following a NEER Depreciation shock. These results show that price and exchange stability matters.

Jacco L. Wielhouwer - One of the best experts on this subject based on the ideXlab platform.

  • Optimal dynamic investment policy for different tax Depreciation rates and economic Depreciation rates
    2020
    Co-Authors: Jacco L. Wielhouwer, A.m.b. De Waegenaere, Peter M. Kort
    Abstract:

    Abstract This paper analyzes the investment policy consequences of incorporating a tax Depreciation rate different from the economic Depreciation rate. Most often, firms choose their tax Depreciation rate in a strategic way. Therefore, it would be a coincidence, should the optimization process lead to a tax Depreciation rate that equals the economic Depreciation rate. The implications of a difference between tax Depreciation rate and economic Depreciation rate are investigated in an optimal control model for the determination of the firm investment policy over time. (This abstract was borrowed from another version of this item.)

  • Investment Decisions and Depreciation Choices under a Discretionary Tax Depreciation Rule
    European Accounting Review, 2017
    Co-Authors: Jacco L. Wielhouwer, Eelke Wiersma
    Abstract:

    Prior studies have shown limited impact of the US bonus Depreciation rules on firm investments during economic downturns. In this article we study the effects of a set of more flexible rules – discretionary tax Depreciation (DTD) – introduced in the Netherlands during the 2009–2011 economic crisis. Our simulation results show DTD, which allows firms to accelerate and also to postpone Depreciation, to be much more effective than bonus Depreciation in reducing the expected value of tax payments, especially in crisis periods. Using a sample of 325 clients of a single office of a Dutch accounting firm, we show that DTD has led to higher investments in assets qualifying for discretionary Depreciation for firms that faced the highest marginal tax rate. For other firms, the additional investments crowd out investments in assets that do not qualify for DTD. Our analysis on the actual Depreciation choices reveals that firms postpone Depreciation when facing losses or loss carry forwards, or to smooth taxable income under the progressive tax system. Our results suggest that a fiscal policy that permits firms to postpone Depreciation, as well as to accelerate, may stimulate investment

  • Dynamic tax Depreciation strategies
    OR Spectrum, 2010
    Co-Authors: A.m.b. De Waegenaere, Jacco L. Wielhouwer
    Abstract:

    The tax Depreciation decision potentially has significant impact on the profitability of firms and projects. Indeed, the Depreciation method chosen for tax purposes affects the timing of tax payments, and, as a consequence, it also affects the after-tax net present value of investment projects. Previous research focusses on the optimal choice of Depreciation method under the assumption that the Depreciation method has to be set ex ante and cannot be changed during the useful life of the asset. However, several countries allow changes of Depreciation method under certain circumstances. This paper develops a dynamic programming approach to determine the firm's optimal choice with regard to the initial Depreciation method, and whether changes of method are proposed in later periods.

  • Optimal dynamic investment policy for different tax Depreciation rates and economic Depreciation rates
    Journal of Optimization Theory and Applications, 2000
    Co-Authors: Jacco L. Wielhouwer, A.m.b. De Waegenaere, Peter M. Kort
    Abstract:

    This paper analyzes the investment policy consequences of incorporating a tax Depreciation rate different from the economic Depreciation rate. Most often, firms choose their tax Depreciation rate in a strategic way. Therefore, it would be a coincidence, should the optimization process lead to a tax Depreciation rate that equals the economic Depreciation rate. The implications of a difference between tax Depreciation rate and economic Depreciation rate are investigated in an optimal control model for the determination of the firm investment policy over time.

  • Optimal Dynamic Investment Policy Under Different Rates for Tax Depreciation and Economic Depreciation
    SSRN Electronic Journal, 1999
    Co-Authors: Jacco L. Wielhouwer, A.m.b. De Waegenaere, Peter M. Kort
    Abstract:

    This paper analyzes the consequences of incorporating a different rate for tax Depreciation than for economic Depreciation. Firms most often choose their tax Depreciation rate in a strategic way. It would therefore be a coincidence if this optimization process leads to a tax Depreciation rate that equals the economic Depreciation rate. The implications of a difference between tax Depreciation and economic Depreciation are investigated in an optimal control model for the determination of the firm's optimal investment policy over time.

Stephen M. Miller - One of the best experts on this subject based on the ideXlab platform.

Peter M. Kort - One of the best experts on this subject based on the ideXlab platform.

Ashish Pandharipande - One of the best experts on this subject based on the ideXlab platform.

  • Lumen Depreciation Diagnosis in Modulated LED Lighting Systems
    IEEE Photonics Technology Letters, 2013
    Co-Authors: Jianfei Dong, Ashish Pandharipande
    Abstract:

    Lumen Depreciation is the condition that the light output of a light emitting diode (LED) lamp falls below a fraction of its peak output. In LED lighting systems with multiple LED lamps, lumen Depreciation leads to undesired distortions in the rendered illumination distribution. Automatic diagnosis of lumen Depreciation in LED lighting systems is thus an important problem. We propose an approach to diagnose lumen Depreciation in individual LEDs using photosensors by modulating the LED lamp output with a unique identifier and encoding average drive current within, and a carrier sense multiple access on the optical channel. At the photosensor, the received signal is processed in the electrical domain. The average drive current corresponding to an individual LED lamp is extracted and a residual is computed with respect to a nominal value. A threshold detector based on testing the mean change of the residual signal is used to diagnose lumen Depreciation of the LED lamps.

  • Diagnosing Lumen Depreciation in LED Lighting Systems: An Estimation Approach
    IEEE Transactions on Signal Processing, 2012
    Co-Authors: Jianfei Dong, Ashish Pandharipande, Willem Van Driel, Guoqi Zhang
    Abstract:

    Lumen Depreciation, the condition that the light output falls below a fraction of its peak output, is known to be the main failure mode in light emitting diodes (LEDs). In lighting systems comprising multiple LEDs, lumen Depreciation leads to reduced average illuminance and a distorted illumination rendering. Diagnosing lumen Depreciation in LED lighting systems is thus an important problem. We propose an estimation approach to diagnosing individual LED failures using a photosensor system. We specifically study the impact of perturbations in the photosensor positions on diagnosability by analyzing the sensor output matrix-the matrix relating the luminous flux values of the multiple LEDs to the measurements at the photosensor system. The conditions on diagnosability are first derived in terms of bounds on the smallest singular value of the sensor output matrix. Subsequently, sufficient conditions are derived on the photosensor positions to ensure that individual LED lumen Depreciations are diagnosable. Numerical results are provided to validate our analytical results.

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