Inflation, Tax Rules, and the Stock Market

47 Pages Posted: 28 May 2004 Last revised: 10 Aug 2010

See all articles by Martin S. Feldstein

Martin S. Feldstein

National Bureau of Economic Research (NBER) (deceased); Harvard University (deceased)

Date Written: November 1979

Abstract

This paper shows how the interaction of tax rules and expected inflation can decrease substantially the share price per dollar of pretax earnings. The current analysis extends my earlier study [Feldstein (1978)] by recognizing corporate debt, retained earnings, and the role of diverse shareholder investments. As before, the analysis separates household and institutional investors.

Suggested Citation

Feldstein, Martin S., Inflation, Tax Rules, and the Stock Market (November 1979). NBER Working Paper No. w0403, Available at SSRN: https://ssrn.com/abstract=261251

Martin S. Feldstein (Contact Author)

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