Securities Transactions Taxes and Financial Crises

Benoît Carmichael, Jean Armand Gnagne and Kevin Moran

Cahiers de recherche from CIRPEE

Abstract: This paper assesses the impact that a widely-based Securities Transaction Tax (STT) could have on the likelihood of systemic financial crises. We apply the methodology developed by Demirgüç-Kunt and Detragiache (1998) [IMF Staff Papers 45 (1)] to a panel dataset of 34 OECD countries for the sample 1973 – 2012, using a measure of a country’s average bid-ask spread in financial markets as a proxy for the likely effect of a STT on transactions costs. Our results indicate that the establishment of a STT could sizeably increase the risk of financial crises.

Keywords: Securities Transaction Tax; Tobin Tax; Regulation; Financial Crises (search for similar items in EconPapers)
JEL-codes: E13 G15 G17 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-ban, nep-cfn, nep-fmk and nep-mac
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Citations: View citations in EconPapers (1)

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http://www.cirpee.org/fileadmin/documents/Cahiers_2015/CIRPEE15-15.pdf (application/pdf)

Related works:
Working Paper: Securities Transactions Taxes and Financial Crises (2015)
Working Paper: Securities Transactions Taxes and Financial Crises (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:lvl:lacicr:1515

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