Monte-Carlo Simulations Revised: A Reply to Arqus

Sabrina Dorn

No 73, ifo Working Paper Series from ifo Institute - Leibniz Institute for Economic Research at the University of Munich

Abstract: This contribution revises Monte-Carlo based simulation techniques as used in Business Taxation and Accounting literature, most prominently proposed by fellows of Therefore, we focus on a methodically orientated discussion. Our results suggest the standard approach leads to biased estimates of expected discounted tax payments assuming cash flow uncertainty and incomplete loss-offset regulations. We built up critique by giving an analytical expression for expected discounted tax payments formulating the structure of probability weighted tax states in the future conditional cash flows above or be-low zero. Consequently, this enables us to evaluate the results obtained from the standard Monte-Carlo approach within a numerical analysis.

JEL-codes: G31 H25 K34 (search for similar items in EconPapers)
Date: 2009
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.ifo.de/DocDL/IfoWorkingPaper-73.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ces:ifowps:_73

Access Statistics for this paper

More papers in ifo Working Paper Series from ifo Institute - Leibniz Institute for Economic Research at the University of Munich Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().