Cover IMF Working Papers
Buy Book in Print
Securities Transaction Taxes and Financial Markets
Author:
Mr. Karl F Habermeier
Search for other papers by Mr. Karl F Habermeier in
Current site
Google Scholar Close
and
Mr. Andrei A Kirilenko
Search for other papers by Mr. Andrei A Kirilenko in
Current site
Google Scholar Close
Series:
IMF Working Papers
Volume/Issue:
Volume 2001: Issue 051
Language:
English
Publication Date:
01 May 2001
DOI:
https://doi.org/10.5089/9781451847116.001
ISBN:
9781451847116
ISSN:
1018-5941
Pages:
30
Keywords:
WP; informational efficiency; price discovery; equity trading; securities transaction taxes; capital controls; transaction volume; round-trip transaction; transaction price volatility; market liquidity; market microstructure study; derivative transaction; securities transaction tax; market participant; Transaction tax; Stocks; Asset prices; Options; North America
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
Download PDF (841.1 KB) Download Epub
This paper argues that securities transaction taxes "throw sand" not in the wheels, but into the engine of financial markets where the transformation of latent demands into realized transactions takes place. The paper considers the impact of transaction taxes on financial markets in the context of four questions. How important is trading? What causes price volatility? How are prices formed? How valuable is the volume of transactions? The paper concludes that transaction taxes or such equivalents as capital controls can have negative effects on price discovery, volatility, and liquidity and lead to a reduction in the informational efficiency of markets.
  • Collapse
  • Expand
Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund