Resource title

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

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Resource description

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.

Resource author

Markus Haberer

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Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/23568

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Adapt according to the presented license agreement and reference the original author.