Browsing by Author "Cosimano, TF"

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Open Access
Capital Trading, Stock Trading, and the Inflation Tax on Equity
(Review of Economic Dynamics, 2001-07-01) Chami, R; Cosimano, TF; Fullenkamp, C
A market for used capital goods, or financial instruments that represent the ownership of the used capital goods, induces inflation taxes on wealth and on the nominal income flows that they provide. This paper explicitly introduces trading in either used capital goods or financial instruments into the standard stochastic growth model with money and production. These two monetary economies are equivalent. The value of the firm is equal to the firm's capital stock divided by inflation. The resulting asset-pricing conditions indicate that the effect of inflation on asset returns differs from the effects found in the literature by the addition of a significant wealth tax. Journal of Economic Literature Classification Numbers: E0, E4, E5. © 2001 Academic Press.
Open Access
Capital trading, stock trading, and the inflation tax on equity: A note
(Review of Economic Dynamics, 2003-10-01) Baier, S; Carlstrom, CT; Chami, R; Cosimano, TF; Fuerst, TS; Fullenkamp, C
Open Access
The Stock Market Channel of Monetary Policy
(1999) Chami, R; Cosimano, TF; Fullenkamp, C
argues that the stock market is an important channel of monetary policy. Monetary policy affects real economic activity because inflation levies a property tax on stocks in addition to an income tax on dividend payments. Inflation thus taxes stocks more heavily than it does bonds. Households alter their required rate of return as inflation changes, and firms adjust production in order to satisfy their shareholders` demands. As the stock market channel grows in importance, the appropriate intermediate target for the central bank is the price level, with price stability being the ultimate goal.