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

Loading...
Thumbnail Image

Date

2001-07-01

Journal Title

Journal ISSN

Volume Title

Repository Usage Stats

399
views
394
downloads

Citation Stats

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.

Department

Description

Provenance

Subjects

Citation

Published Version (Please cite this version)

10.1006/redy.2001.0129

Publication Info

Chami, R, TF Cosimano and C Fullenkamp (2001). Capital Trading, Stock Trading, and the Inflation Tax on Equity. Review of Economic Dynamics, 4(3). pp. 575–606. 10.1006/redy.2001.0129 Retrieved from https://hdl.handle.net/10161/2050.

This is constructed from limited available data and may be imprecise. To cite this article, please review & use the official citation provided by the journal.

Scholars@Duke

Fullenkamp

Connel Fullenkamp

Professor of the Practice of Economics

Professor Fullenkamp specializes in the investigation of financial market development and regulation of financial markets. His projects often involve the exploration of such variables as immigrant worker remittances, economic policy, and the development of countries. His completed papers have appeared in various leading academic journals, including The Cato Journal, the Journal of Banking and Finance, the Review of Economic Dynamics, and the Review of Economics and Statistics. Titles of his publications include, “Capital Trading, Stock Trading, and the Inflation Tax on Equity” with Scott Baier, Charles Carlstrom, Ralph Chami, Thomas Cosimano, and Timothy Fuerst; “Assessing Individual Risk-Attitudes Using Field Data from Lottery Games” with Rafael Tenorio and Robert Battalio; “Are Immigrant Remittance Flows a Source for Capital Development” with Ralph Chami and Samir Jahjah; and more. Professor Fullenkamp is currently focusing his studies on the impact of immigrant remittances on economic growth and the framework for financial market development.


Unless otherwise indicated, scholarly articles published by Duke faculty members are made available here with a CC-BY-NC (Creative Commons Attribution Non-Commercial) license, as enabled by the Duke Open Access Policy. If you wish to use the materials in ways not already permitted under CC-BY-NC, please consult the copyright owner. Other materials are made available here through the author’s grant of a non-exclusive license to make their work openly accessible.