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In the wake of the recent financial crisis, several commentators have suggested a transaction tax on financial markets. The potential consequences of such a tax could be hazardous to the financial markets affected as well as to the economy. In this paper, we review the relevant theoretical and...
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We study the impact of a financial transaction tax (FTT) in a model that combines asset trade and real investment. An informed trader holds private information about the fundamental value of a firm and the firm's manager relies on the asset price to infer such information and invest accordingly....
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We investigate the effects of a Financial Transaction Tax (FTT) in an order-driven artificial financial market. FTTs are meant to limit short-term speculative behavior by reducing the amount of excess liquidity in the system. To quantify these effects, adjustments in trading strategies and their...
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regulation was designed to lend crutches to them when it appeared that they needed support. While modern finance theory has …How we think about financial markets determines how we regulate them. Since the 1970s modern finance theory has shaped … the overriding concern for regulation. This essay raises the question whether this is indeed the case. What if other …
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