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Capital Trading, Stock Trading, and the Inflation Tax on Equity

dc.contributor.author Chami, Ralph
dc.contributor.author Cosimano, Thomas F
dc.contributor.author Fullenkamp, Connel
dc.date.accessioned 2010-03-09T15:42:33Z
dc.date.issued 2001-07-01
dc.identifier.issn 1094-2025
dc.identifier.uri http://hdl.handle.net/10161/2050
dc.description.abstract 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.
dc.format.mimetype application/pdf
dc.language.iso en_US
dc.relation.ispartof Review of Economic Dynamics
dc.relation.isversionof 10.1006/redy.2001.0129
dc.title Capital Trading, Stock Trading, and the Inflation Tax on Equity
dc.type Journal article
pubs.begin-page 575
pubs.end-page 606
pubs.issue 3
pubs.organisational-group Duke
pubs.organisational-group Economics
pubs.organisational-group Trinity College of Arts & Sciences
pubs.publication-status Published
pubs.volume 4


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