Global Imbalances and Taxing Capital Flows

Goodhart, Charles, Peiris, Udara and Tsomocos, Dimitrios (2013) Global Imbalances and Taxing Capital Flows. International Journal of Central Banking, 9 (2). pp. 13-45.


We study a monetary economy with two large open economies displaying net real and financial flows. If default on cross-border loans is possible, taxing financial flows can reduce its negative consequences. In doing so it can improve welfare unilaterally, in some cases in a Pareto sense, via altering the terms of trade and reducing the costs of such default.

Item Type: Article
Subject(s): Finance
Date Deposited: 25 Sep 2013 15:36
Last Modified: 30 Sep 2016 10:34

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