Arbeitspapier
Can a financial transaction tax prevent stock price booms?
We present a stock market model that quantitatively replicates the joint behavior of stock prices, trading volume and investor expectations. Stock prices in the model occasionally display belief-driven boom and bust cycles that delink asset prices from fundamentals and redistribute considerable amounts of wealth from less to more experienced investors. Although gains from trade arise only from subjective belief di¤erences, introducing financial transactions taxes (FTTs)remains undesirable. While FTTs reduce the size and length of boom-bust cycles, they increase the likelihood of such cycles, therby overall return volatility and wealth redistribution. Contingent FTTs, which are levied only above a certain price threshold, give rise to problems of equilibrium multiplicity and non-existence.
- Sprache
-
Englisch
- Erschienen in
-
Series: Working Paper Series ; No. 15-10
- Klassifikation
-
Wirtschaft
Asset Pricing; Trading Volume; Bond Interest Rates
Expectations; Speculations
- Thema
-
financial transactions tax
Tobin tax
asset price booms
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Adam, Klaus
Marcet, Albert
Merkel, Sebastian
Beutel, Johannes
- Ereignis
-
Veröffentlichung
- (wer)
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University of Mannheim, Department of Economics
- (wo)
-
Mannheim
- (wann)
-
2015
- Handle
- URN
-
urn:nbn:de:bsz:180-madoc-390243
- Letzte Aktualisierung
-
10.03.2025, 11:44 MEZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Adam, Klaus
- Marcet, Albert
- Merkel, Sebastian
- Beutel, Johannes
- University of Mannheim, Department of Economics
Entstanden
- 2015
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