Accounting Application over the Edgeworth Box to Assess Banking Activity in Southeast Asia Countries

Journal of Economics and Business

ISSN 2615-3726 (Online)

ISSN 2621-5667 (Print)

Published: 15 February 2019

Accounting Application over the Edgeworth Box to Assess Banking Activity in Southeast Asia Countries

Miguel Ángel Pérez Benedito

Universidad de Valencia

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10.31014/aior.1992.02.01.65

Abstract

The manuscript considers that accounting information of financial statements is synthetic information of the process of decision-making, and the Edgeworth box is a laboratory to assess banking activity. The effects of decision-making process are explained by economic-financial models according to the principle of double entry. This model enables getting an accounting equilibrium equation with four variables which have economic and financial significance and can be represented in an Edgeworth bo by several transformations. The banking positions in the Edgeworth box visually explain levels of financial risk and their respective economic covertures according to the evolution of macroeconomic variables in Southeast Asian countries.

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