On the non-homogeneous effect of financial transaction taxes

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On the non-homogeneous effect of financial transaction taxes. / Thöni, Patrick.

I: Economics and Business Letters, Bind 9, Nr. 3, 08.12.2020, s. 230-239.

Publikation: Bidrag til tidsskrift › Tidsskriftartikel › Forskning › fagfællebedømt

Harvard

Thöni, P 2020, 'On the non-homogeneous effect of financial transaction taxes', Economics and Business Letters, bind 9, nr. 3, s. 230-239. https://doi.org/10.17811/ebl.9.3.2020.230-239

APA

Thöni, P. (2020). On the non-homogeneous effect of financial transaction taxes. Economics and Business Letters, 9(3), 230-239. https://doi.org/10.17811/ebl.9.3.2020.230-239

Vancouver

Thöni P. On the non-homogeneous effect of financial transaction taxes. Economics and Business Letters. 2020 dec. 8;9(3):230-239. https://doi.org/10.17811/ebl.9.3.2020.230-239

Author

Thöni, Patrick. / On the non-homogeneous effect of financial transaction taxes. I: Economics and Business Letters. 2020 ; Bind 9, Nr. 3. s. 230-239.

Bibtex

@article{d6e61473b89549a7aa195a3ba2949494,
title = "On the non-homogeneous effect of financial transaction taxes",
abstract = "This paper investigates the impact of a financial transaction tax (FTT) in a classic financial market setting. The benchmark analysis is based on an extension of the model presented in Kyle (1985). Opposed to the existing literature, I am able to find equilibrium values with a linear tax. Results of the benchmark model confirm standard findings of FTTs, such as an increased bid–ask spread and an overall less deep market. Importantly, I find that the introduction of a tax leads to a non–linear pricing function. In turn, the model predicts a decrease in market depth and trading aggressiveness for small trades, whereas for larger trades the introduction of an FTT only leads to increased prices and spreads.",
author = "Patrick Th{\"o}ni",
year = "2020",
month = dec,
day = "8",
doi = "10.17811/ebl.9.3.2020.230-239",
language = "English",
volume = "9",
pages = "230--239",
journal = "Economics and Business Letters",
issn = "2254-4380",
publisher = "Oviedo University Press",
number = "3",

}

RIS

TY - JOUR

T1 - On the non-homogeneous effect of financial transaction taxes

AU - Thöni, Patrick

PY - 2020/12/8

Y1 - 2020/12/8

N2 - This paper investigates the impact of a financial transaction tax (FTT) in a classic financial market setting. The benchmark analysis is based on an extension of the model presented in Kyle (1985). Opposed to the existing literature, I am able to find equilibrium values with a linear tax. Results of the benchmark model confirm standard findings of FTTs, such as an increased bid–ask spread and an overall less deep market. Importantly, I find that the introduction of a tax leads to a non–linear pricing function. In turn, the model predicts a decrease in market depth and trading aggressiveness for small trades, whereas for larger trades the introduction of an FTT only leads to increased prices and spreads.

AB - This paper investigates the impact of a financial transaction tax (FTT) in a classic financial market setting. The benchmark analysis is based on an extension of the model presented in Kyle (1985). Opposed to the existing literature, I am able to find equilibrium values with a linear tax. Results of the benchmark model confirm standard findings of FTTs, such as an increased bid–ask spread and an overall less deep market. Importantly, I find that the introduction of a tax leads to a non–linear pricing function. In turn, the model predicts a decrease in market depth and trading aggressiveness for small trades, whereas for larger trades the introduction of an FTT only leads to increased prices and spreads.

U2 - 10.17811/ebl.9.3.2020.230-239

DO - 10.17811/ebl.9.3.2020.230-239

M3 - Journal article

VL - 9

SP - 230

EP - 239

JO - Economics and Business Letters

JF - Economics and Business Letters

SN - 2254-4380

IS - 3

ER -

ID: 252830646