Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/80220
Authors: 
Citanna, A.
Polemarchakis, H. M.
Tirelli, M.
Year of Publication: 
2001
Series/Report no.: 
Working Paper, Brown University, Department of Economics 2001-21
Abstract: 
When the asset market is incomplete, there typically exist taxes on trades in assets and a redistribution of revenue in the asset market that are Pareto improving. The policy is anonymous, it economizes on complexity, and it results in ex post Pareto optimal allocations; it is publicly announced before markets open, thus fully and correctly anticipated by traders, it does not require that financial markets be shut down, and it does not modify the asset market structure. As such, it improves over previously proposed constrained interventions.
Subjects: 
taxes, incomplete asset market, equilibrium, Pareto improvement
JEL: 
D52
D60
H20
Document Type: 
Working Paper

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