International Conference on Eurasian Economies
1-3 July 2014 – Skopje, MACEDONIA
Paper detail
Paper ID : 890
Status : Paper published
Language : Turkish
Topic : Finance and Financial Crises
Presenter: Asst. Prof. Dr. Deniz Aytaç
Session : 2C Finansal Kriz I
The Global Financial Crisis and the Stabilizing Effect of Financial Transaction Taxes
Küresel Finans Krizi ve Finansal İşlem Vergilerinin İstikrarlandırıcı Etkisi
- Asst. Prof. Dr. Deniz Aytaç (Hitit University, Türkiye)
Abstract
With the liberalization policies that started in the 1980s, almost a race began in lifting the barriers to capital movements, particularly in developing countries, with the aim of achieving capital inflows from countries with a savings surplus to countries with a current deficit. However, the crises that broke out one after another in the liberalized financial markets in the 1990’s and the global crisis that occurred in the 2007-2008 period as a result of increased volatility in short-term capital movements and of excessive credit growth have raised again the need to bring short-term capital movements under control. The present study discusses the feasibility of financial transaction taxes as a stabilizer in the economy due to the need to mitigate the destructive impacts of financial crises and to finance the economic damage after the crisis or, in other words, the increased need for fiscal consolidation resulting from the crisis. In the light of the findings obtained, it has been noted that financial transaction taxes applied at a low rate in financing the increased public debt on account of the support provided to the financial sector because of the crisis constitute an important item of revenue due to the high volatility in short-term capital movements. In this context, it has been concluded that financial transaction taxes, although difficulties are encountered in their application, can have a considerable stabilizing effect in the future, taking the periodical nature of financial crises into account.
JEL codes: H60, H20, G01
Aytaç, Deniz (2014). "The Global Financial Crisis and the Stabilizing Effect of Financial Transaction Taxes" in Proceedings of International Conference of Eurasian Economies 2014, pp.493-498, Skopje, MACEDONIA.
DOI: https://doi.org/10.36880/C05.00890
