Might a Securities Transactions Tax Mitigate Excess Volatility? Some Evidence From the Literature

Arbeitspapier

International financial markets are said to be excessively volatile due to destabilizing speculation and excessive market volume. Transactions taxes might help. From studying the literature we conclude that there must be an optimal market liquidity, which minimizes excess volatility. There are two effects when imposing a transactions tax. Both reduce excess volatility in highly speculative markets when tax rates are small. The total tax effect then is unambiguous. However, in illiquid markets the tax might raise volatility.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CoFE Discussion Paper ; No. 04/06

Classification and Topics

• Classification: Wirtschaft ; Taxation, Subsidies, and Revenue: General ; International Financial Markets ; General Financial Markets: Government Policy and Regulation
• Subject: International Financial Markets ; Securities Transactions Tax ; Excess Volatility ; Börsenkurs ; Volatilität ; Börsenumsatzsteuer ; Internationaler Finanzmarkt ; Wertpapierspekulation ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Haberer, Markus
• Event: Veröffentlichung
• (who): University of Konstanz, Center of Finance and Econometrics (CoFE)
• (where): Konstanz
• (when): 2004

Further information

• Handle: http://hdl.handle.net/10419/23568
• URN: urn:nbn:de:bsz:352-opus-17579
• Last update: 10.03.2025, 11:45 AM CET