Veranstaltungen des DIW Berlin/
Events of DIW Berlin

9. Dez 2015

DIW Seminar on Macroeconomics and Econometrics 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 differences, 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. 

Mehr Informationen
Referent/-in
  • Klaus Adam, University of Mannheim
  • Zeit
    12:00 - 13:15
    Ort
    Gustav-Schmoller-Raum DIW Berlin im Quartier 110 Raum 3.3.002A Mohrenstraße 58 10117 Berlin
    Ansprechpartner/-in
    im DIW Berlin
    Tel.: +49 30 89789 492