The taxation of trades in assets

A. CITANNA, H. Tirelli, H. Polemarchakis

Journal of Economic Theory

janvier 2006, vol. 126, n°1, pp.299-313

Départements : Economie et Sciences de la décision

Mots clés : Taxes, Pareto improvement, Incomplete asset markets, Competitive equilibrium

When the asset market is incomplete, there typically exist taxes on trades in assets that are Pareto improving. This fiscal policy is anonymous, it is fully and correctly anticipated by traders, and it results in ex post Pareto optimal allocations; as such, it improves over previously proposed constrained interventionsKeywords: Taxes; Pareto improvement; Incomplete asset markets; Competitive equilibrium